Computer Sciences and Information Technology
Comparison between SAP ERP & Three ERP Systems
You are IT consultant team in a medium-size company the top management of your company requested a study about the possibility of implementing ERP systems . you should submit a full report about this study and your report should include the following:
1. A brief about ERP systems Including the benefits and drawbacks of these systems
2. Comparison between the most famous Commercial ERP systems (SAP ERP System) and free ERP systems at least Three ERP systems applications. The Comparison Criteria should have at least five points such as cost, information security, reliability, function areas, maintenance services and usability
You should include references to support your study
In today’s business environment, business owners should advocate for effective processes that form important building blocks to an organization’s success. With new technologies emerging, Pearlson and Saunders (2010) argue that organizations have no option but to enhance their software systems to improve various business processes and enhance workflow management. ERP systems support numerous operations within an organization, which is crucial to ensure that different activities within a business organization such as relationship management between clients and supply chain management, among others, facilitate for essays access to various departments within an organization (Pearlson & Saunders, 2010). In other words, ERP systems can cover different functionalities and then integrate them into a common database. This paper gives a brief discussion of ERP systems, explains their pros and cons, and makes comparisons between an SAP ERP and other Three ERP Systems.
A Brief about ERP Systems
An ERP refers to software with the ability to standardize, interrogate, and streamline business processes across different departments within an organization (Almeida & Teixeira, 2012). ERP systems usually operate on integrated software platforms that apply common data definitions that operate on single databases.
The characteristics that define an ERP system include the following; it is an integral part of any organization because it allows for the control of different processes within an organization by ensuring that all departments are interrelated (Almeida & Teixeira, 2012). An ERP is also adaptable to organization unique aspects based on the ground that each company has its specific characteristics. Finally, ERP systems understand that every organization is made up of a combination of different departments which are interrelated or connected through the information they generate from various processes and share (Almeida & Teixeira, 2012).
Uses of an ERP system
ERP systems improve an organization’s effectiveness and efficiency through;
First, they are used in the integration of financial information, where without a well-integrated system, it is very hard for individual departments within an organization to coordinate effectively and efficiently (Almeida & Teixeira, 2012). As such, it ensures that staff at different levels within an organization don’t have to waste a lot of time and resources trying to reconciling numbers, a factor that improves efficiency within an organization.
ERP also coordinates various activities within an organization such as order taking, manufacturing, and accounting, among others (Almeida & Teixeira, 2012). Having this system in place ensures that organizations can easily undertake various tasks with very little errors.ERP systems also provide insights generated from customer information, where CRM tools are applied to track customer interactions. Manufacturing companies also leverage ERP systems to standardize and speed up their processes, which saves time, reduces headcount while increasing productivity (Almeida & Teixeira, 2012).
Benefits of ERP Systems
There are numerous benefits associated with ERP systems, key among them include the following;
ERP Systems enhance an organization’s internal efficiency. ERP systems operating properly enable organizations to reduce the overall time required to finish nearly all business processes (Mishra, 2011).
Another benefit is that it allows organizations to make better decisions by promoting collaboration through shared data that usually organized around very common data definitions (Mishra, 2011). Shared data ensures that time wasted on data quality is eliminated, thus allowing an organization’s departments to spend more time analyzing their data and making conclusions that lead to better decision making processes.
ERP Systems allows organizations to have increased agility. Simplification and standardization of an organization’s operations lead to fewer rigid structures. This factor creates agile enterprises that can adapt quickly and, at the same time, enhancing the overall potential for collaborative efforts within an organization (Mishra, 2011).
Finally, ERP systems lead to enhanced security within an organization. Today a centralized database containing enterprise data has become huge targets for cybercriminals. Still, ERP systems allow organizations to secure their data more easily, especially in situations where it is scattered across different servers (Mishra, 2011).
Drawbacks of ERP Systems
One of the drawbacks of an ERP system is that its installation tends to be a costly affair. The overall costs of installing, implementing, and marinating an ERP system tend to be very costly, with some studies suggesting that it eats up nearly 20% of the total budget (Grabis, 2019). As such, this can be very expensive for some organizations, especially those that still not well established. In some cases, additional IT staff may have to be hired to run this ERP system, a factor that increases the overall costs of operations within an organization.
Another drawback is that ERP system managers have to strike a balance between too much and too little customization of the system, failure to which it would not function properly. Grabis (2019) suggests that too little customizations often results in ERP systems failing to integrate properly, while too much customization usually slows the ERP system process. This factor can make it very difficult to upgrade.
Another limiting factor of the ERP systems is that its success is dependent on the experience, education, and skill level of its employees, where deficiencies in these factors lead to the system being unable to work properly (Grabis, 2019).
Comparison between SAP ERP and Three ERP Systems
SAP ERP is arguably the large software application with roughly 170 000 clients globally, and it aims to help business managers to effectively manage their human capital, procurement, and other organizational functionalities (Al-Ghofaili & Al-Mashari, 2014). Other functionalities include offering organizations with business analytics capabilities, thus helping to improve the functionalities of different departments. SAP ERP availability is usually on a price-quote basis, which can be brought like a traditional on-premise application. SAP ERP’s current costs are roughly $150/user/month (Al-Ghofaili & Al-Mashari, 2014). SAP ERP comes with a Smart Cybersecurity scan Platform that offers a wide-range check that is geared towards discovering any current security issues. Al-Ghofaili & Al-Mashari (2014) adds that SAP ERP also has a failure mode analysis that evaluates the reliability and availability of specific usability and maintenance services. The factors make SAP ERP to be among the best ERP system in the industry.
Customer Relationship Management (CRM)
CRM is another important ERP system, and it helps manufacturers handle their clients throughout the organizations on various aspects like sales and marketing (Al-Ghofaili & Al-Mashari, 2014). This system can provide clear information regarding specific clients. CRM tracks the client’s information, such as their contacts, sales leads, and existing contracts. Al-Ghofaili & Al-Mashari (2014) suggest that CRM system price is dependent on many factors such as the project’s relative difficulty, number of features, deployment costs, and support, among other factors. CRM is preferred by most organizations, mainly because of its stability and security, which are factors that make CRM workflows intuitive and simple (Al-Ghofaili & Al-Mashari, 2014). Finally, the usability and service maintenance of CRM is crucial because it ensures that compared to other conventional models, it can utilize other fields effectively.
NetSuite as an ERP
NetSuite is a cloud-based enterprise resource planning system that is currently being used by numerous organizations. The main function of this system is that it offers a scalable remedy for operating key back-office operations as well as other financial business processes within the cloud (Grabis, 2019). Among the functionalities that can be done using this system includes providing solutions for warehouse management, billing, and inventory, as well as supply chain management (Grabis, 2019). The fact that it is a cloud-based platform means that it is cheaper to install and maintain within an institution compared to SAP and CRM systems. The fact that the systems require an internet connection for it to function properly can be a little bit inconveniencing, especially for organizations operating in areas with low internet connectivity. At the same time, an organization can be exposed to cybersecurity risks (Grabis, 2019).
In conclusion, ERP is systems operating within an organization and helps various departments to undertake its operations effectively, thus enabling them to achieves their set goals. Common examples of ERP systems are SAR, CRMs, NetSuite, and various Cloud computing platforms. In business management, ERP systems support various areas like human resource management; meeting client’s needs as well as marketing for various efficient operations. Unlike with cloud computing platforms, CRM, NetSuite, and SAP ERP systems allow for the effective integration of different business processes to achieve the goals set within a business. With modern technologies on the rise, it has highlighted the fact that there us a need to come up with modern software systems that can link main processes within an organization.
Al-Ghofaili, A. A., & Al-Mashari, M. A. (2014). ERP system adoption traditional ERP systems vs. cloud-based ERP systems. Fourth Edition of the International Conference on the Innovative Computing Technology (INTECH 2014). doi: 10.1109/intech.2014.6927770
Almeida, R., & Teixeira, M. N. D. O. (2012). Evaluating the Success of ERP Systems’ Implementation. Organizational Integration of Enterprise Systems and Resources, 131–148. doi: 10.4018/978-1-4666-1764-3.ch008
Grabis, J. (2019). Optimization of Gaps Resolution Strategy in Implementation of ERP Systems. Proceedings of the 21st International Conference on Enterprise Information Systems. doi: 10.5220/0007710000840092
Mishra, A. (2011). Achieving Business Benefits from ERP Systems. Enterprise Information Systems, 1279–1294. doi: 10.4018/978-1-61692-852-0.ch507
Pearlson, K. E., & Saunders, C. S. (2010). Managing and using information systems: a strategic approach. Hoboken, NJ: John Wiley & Sons.