Enterprise Resource Planning System Design

ERP System Concepts

ERP Architecture and Its Successful Implementation

The enterprise resource planning (ERP) system is a general term that is used in the description of a set of applications that integrate database input, processing, and accessibility as well as several other functions in different business units. Operation managers implement EPR systems to streamline processes and functionality in the different departments in the enterprise (Buonanno et al., 2005). The EPR system architecture is an organization of layers or tiers that manage system complexity to provide scalability and flexibility. Today, the most prevalent ERP system is the three-layer architecture server that incorporates web, application, and database servers (Botta-Genoulaz, Millet, & Grabot, 2005).

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The successful implementation of an EPR system is dependent on several factors. Having clear and quantifiable project goals is necessary for the effective execution of the EPR system. A comprehensive analysis of the organization’s objectives and vision is also requisite. Additionally, competency in the management of the project is necessary for successful implementation. Furthermore, aspects of scalability, customizability, and user-friendliness are key success factors for an ERP system (Gargeya & Brady, 2005).

EPR Functional Modules

According to Gargeya and Brady (2005), the major ERP functional modules include:

  1. Purchase
  2. Product planning
  3. Inventory control
  4. Sales
  5. Marketing

Types of ERP Architecture, Their Benefits, and Limitations

The two-tier and three-tier ERP systems are the main architectural types that organizations integrate into their operations management. The two-tier architectures depict a characteristic whereby the server manages both the application and database roles. In this light, the client’s responsibility is the presentation of the data and the delivery of user input to the server. Due to the variety of servers in the two-tier architecture, the distribution of the clients is executed across different types of local and wide-area connectivity. The benefits of the two-tier ERP systems include the facilitation of user-friendliness, accessibility, cost-effectiveness, and high-performance (Botta-Genoulaz et al., 2005).

The three-tier ERP architecture is the commonly used system in the current business world. In this regard, the three-tiered architecture comprises of the web tier, the data tier, and the application tier. The web tier architectural component of the contemporary ERP systems facilitates the accessibility and analysis of the information through the web interface. The application tier incorporates a web browser and a reporting mechanism for the interaction of business processes and end-users. The data tier concentrates on the organization’s data structure and the interaction it has with the internal and external structures. The benefits of the three-tier architecture are that it bolsters scalability, reliability, flexibility, reusability, maintainability, and reusability. The disadvantage of the system is that they are expensive and complex.

Service-Oriented Architecture and Web-Service Architecture

The service-oriented architecture (SOA) is a software development structure founded on a contractual agreement between the client (consumer) and the server (provider). The SOA describes the functional aspects of the service, input necessities and output specifications, and the precondition surrounding before the invocation of the service. The agreement also specifies error handling in the event of a breakdown.

On the other hand, web services architectures comprise applications that permit various types of software applications and features that are integrated together. On the current IT industry standards, the interaction of different applications is possible without communication difficulties. In this regard, web service architecture facilitates the interoperability of machine-to-machine interaction through a particular network. The interoperability aspect is enhanced through the application of XTML based standards like WSDL and UDDI.

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ERP Integration in the Organization

Ed Morse has integrated the ERP system into its operations. The company has adopted Sage 300 ERP to facilitate their employee remuneration processes. In this regard, the Sage 300 ERP facilitates the company’s automobile dealerships through the three-tied architectural system developed by the vendor (Sage 300 ERP, 2012).

The ERP has resulted in significant improvements in the processes associated with correct Payroll setups. The ERP has the capability of configuring all the earnings and deductions of the employees, streamlining the Payroll processes has been achieved, thereby improving the morale of the workforce. Furthermore, the ERP system integration has enhanced the interoperability aspect of Ed Morse’s processes on the Financials and Human Resource Departments.

Additionally, the system has assisted in the easy retrieval of employee payment information through the employee codes. The application’s compensation master also facilitates the performance appraisal initiatives of the company. Moreover, the application has enhanced the operations involved in employee EFT banks and taxation processes (Lea, Mahesh, & Yu, 2005).

The Sage 300 ERP has the capability of being integrated with the Web service architecture. The AR history component of the ERP enhances its compatibility with the Web-based services since transactions regarding payments, invoices, debit notes, and credit notes could be automatically recorded. Below is a diagrammatic representation of Sage 300 ERP at El Morse.

El Morse’s Sage 3000 ERP for Payroll processes
Diagram 1: El Morse’s Sage 3000 ERP for Payroll processes

ERP Module Used in the Past and Its Benefits to the Organization

The use of ERP modules in the organizational setting is common today due to the increased need for efficient processes. I have interacted with the purchasing module and specifically the purchasing module that modernizes the procurement of production inputs and other supplies. The system facilitates the automation of processes involved in the identification of possible suppliers, price negotiation, and the award of purchasing order to the vendors (Botta-Genoulaz et al., 2005).

The purchasing module had a variety of benefits to the organization that bolstered its operations management aspects. The automation feature ensured that sustainable operations through cost automation of the purchases, supplier integration, and improved collaboration. Additionally, the purchasing module enhanced the organization’s resource utilization and the promotion of crosschecking processes (Buonanno et al., 2005).

ERP System Selection

Selecting an appropriate ERP system is essential to enhance the compatibility of the software with the functional processes of a particular organization. In this case, it is crucial for the management team to analyze the approach that would reap maximum benefits for the firm regarding its operational performance and service delivery. However, selecting a suitable ERP system is problematic in most instances, thereby necessitating the need for the application of a strategic approach. In light of this aspect, Ziaee, Fathian, and Sadjadi (2006) conducted a study to delve into the issue of ERP selection.

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Stiff market competition has triggered companies to develop new means of enhancing their sustainability. In this regard, the corporation needs to cut its operational costs, capitalizing on returns, foster return on investments, and facilitate responsiveness to the customer needs (Ziaee et al., 2006). For this reason, ERP systems have continually been integrated into business organizations to streamline finances, materials, and information, as well as strategic support measures.

The procedure for selecting the ERP system should embrace a modular approach that ensures the systems’ compatibility with the needs of the organization. Therefore, Ziaee et al. (2006) approach the selection procedure on the scope of Small and Medium Enterprises (SMEs). A two-stage modular approach to the choice of the ERP vendor and software was recommended for consideration by SME management teams. It should be noted that the active involvement of the stakeholders in the selection process is essential for the system to meet their needs. Thus, commitment, able leadership, and the management’s persistence are crucial for the correct selection of the ERP system.

The preliminary phase acts as the initial stage of the selection process, whereby a team of top management stakeholders requires formulation. The team then proceeds to the modeling and re-engineering the business processes to ensure efficient flow. Afterward, the project team comprising of executives, stockholders, users, and functional experts proceed to gather information regarding the ERP vendor and software from various sources available. The team then picks the best vendor and software based on the classified criteria for selection (Ziaee et al., 2006). The criteria may include strategic fitness, network security and architecture, module competitiveness, processing time, and ease of integration with other systems.

The selection phase then proceeds whereby the best vendor from the identified list is picked. Arrangements on the module to purchase, order or develop through the external experts then follow to ensure that the integration of the right ERP system into the firm. The processes, organizational changes, user interface, data, upgrading, and project team costs guide the process of modular selection (Ziaee et al., 2006).

Personal reflection

The topic of Business Information Systems has been instrumental in instilling the essence of software like ERP systems. The insights created from the architectural and modular aspects of the systems have created new perspectives on approaching business processes with the aim of attaining streamlined processes that foster organizational growth. Additionally, the essence of the accurate selection of the ERP system through a modular approach, as emphasized by Ziaee et al. (2006) has been helpful in understanding the methodologies of integrating the software to realize interoperability, thus resulting in business excellence.

References

Botta-Genoulaz, V., Millet, A., & Grabot, B. (2005). A survey on the recent research literature on ERP systems. Computers in Industry, 56(6), 510-522.

Buonanno, G., Faverio, P., Pigni, F., Ravarini, A., Sciuto, D., & Tagliavini, M. (2005). Factors affecting ERP system adoption: A comparative analysis between SMEs and large companies. Journal of Enterprise Information Management, 18(4), 384-428.

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Gargeya, B., & Cydnee, B. (2005). Success and failure factors of adopting SAP in ERP system implementation. Business Process Management Journal, 11(5), 501-516.

Lea, B., Mahesh, C., & Wen-Bin, Y. (2005). A prototype multi-agent ERP system: an integrated architecture and a conceptual framework. Technovation, 25(4), 433-441.

Sage 300 ERP: Who’s Using Sage 300 ERP? (2012). Web.

Ziaee, M., Fathian, M., & Sadjadi, J. (2006). A modular approach to ERP system selection: A case study. Information Management & Computer Security, 14(5), 485-495.

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