This report is particularly based on the selection and implementation of ERP system to an existing business of Supreme Dry Cleaners (SDC). The major purpose of the report is to evaluate the ERP systems and apply to a business to gain positive outcome. Enterprise Resource Planning (ERP) is based on the idea of identifying and applying a set of highly developed practices, procedures and tools that different functions of a business can use to achieve organizational excellence through integration. It is worth mentioning that global business environments in this era are often characterized by many competitive pressure and sophisticated customers that ask for speedy solutions as well as multiple stable supply chain strategies. Consequently, the business are in the need of a system that satisfy all these requirements and simultaneously can achieve excellence. Taking this concern into consideration, this report discusses the importance of ERP system in business, type of ERP systems and available vendors. The report also includes a gap analysis to identify organization’s requirements to develop the ERP. An evaluation criteria evaluation for the business of Supreme Dry Cleaners (SDC).On the basis of the selection of ERP as a recommendation to business, a suitable justification has been provided.
According to Almajali, Masa’deh and Tarhini (2016), there are several of Enterprise Resource Planning (ERP) vendors available in the field of enterprise technology; thereby, selecting the right ERP solutions can be crucial to business with respect to efficiency and enabling agility. ERP software is designed to provide seamless communication as well as real-time data for business and it is known as an extremely helpful tool which centralizes all islands of information as well as rationalises it to different departments in an enterprise (Altamony, Al-Salti, Gharaibeh and Elyas, 2016). Following are some of the top ERP vendors providing significant operational solutions across many businesses.
SAP: SAP is world leader in enterprise application with respect to software as well as software related service revenue. The customer base of SAP is around 345,000 in more than 180 nations. The organization use global centralized financial management to control liquid assets as well as monitor exposure to interest rates. The primary source of cash, cash equivalents as well as current investment funds of the vendor is generated from the business operations. Over the past few years, the major use of cash in SAP tends to support operation and capital expenditure requirements leading from its business growth. The following data figure shows the financial debt of SAP ERP.
Figure 1: Financial Debt of SAP EPR
(Source: Bretschneider, Leimeister and Mathiassen 2015)
Likewise, another large ERP vendor is Microsoft Dynamic has the complete ERP tools for operation that provide international scalability as well as digital intelligence to help business grow at own pace. ERP software capabilities of this organizations could extend what the business could do with manufacturing, retail, IT and finance. Microsoft Dynamic is supposed to implement more upstream after the larger implementation. This ERP provider is more open system and making the system easier to customize. As the firm is running its operation in a global environment, the business has strengthened its marketing position with the revenue for Dynamics 36 increasing by 67%.
It is estimated that the revenue in the section of dynamic could grow from $1.6bn in 2017 to $4.5bn. In addition, Oracle ERP Cloud also offers a complete, innovative and well-developed solution for organization of all sizes that wish to excel in digital economy. It has been identified that for the overall market share, Oracle is just standing behind Microsoft with 31% but with respect to project cost, Oracle is the most expensive along with the average of $2.38 million. Sage ERP is one such popular ERP vendor with over three million customers internationally. Sage has a vast categories of products on the basis of products category, business size, industry needs and business needs. Besides, Sage ERP, another similar big ERP vendor is Odoo with the overall users around 3.7 million and 1250 business partners (Chauhan and Jaiswal 2016). The organization aims to deliver a series of easy to use business applications that build a complete suite of tools to accompany any business needs.
Among the stated ERP vendors above, SAP ERP has a distinct and clear functions of support service which is categorized into three different sections –SAP support portal, SAP digital services and SAP help portal. All these categorises provide an extended series of services, while Microsoft Dynamic has a little wider support with multiple sections to keep and maintain a clear flow of services. Nonetheless, it is worth mentioning that support system of Microsoft Dynamic is more cumbersome when processing. Denolf et al. (2015) mentioned that when acquiring client it is essential to deliver an optimal solution without possible without any interruptions. This means that the support system should be more reliable and transparent.
When it comes to software and hardware infrastructure, Microsoft Dynamic has a wide variety of software applications including sales, customer service, field service, talent and finance operation, artificial intelligence, retail, etc. On the other side, SAP ERP has developed digital core, digital platform applications, procurement network and analytical software solutions. In a similar context, it is also found that Sage ERP has a long list of software and hardware infrastructure. It has developed several software applications in the field of construction, start-up, construction, cloud computing, manufacturing and many more sub-sections.
It has been identified that global ERP software market is estimated to increase by $41.69 billion by 2020. The estimated figure registers a CAGR of 7.2% during the forecast period 2015 to 2020. In addition to this, it is worth mentioning that ERP allows business to deal with their business process. Gable, Sedera and Chan (2018) mentioned that the significant driver adoption of ERP software market is to increase operational efficiency as well as transparency within the business. According to this article, increasing use of cloud based deployment model is enhancing ERP software market growth. Nonetheless, some of significant challenges that affect business may include increasing cost as well as availability of open resource applications.
It is also identified that ERP software market is categorized on the basis of premise deployment as well as cloud deployment. It is also expected that cloud payment is supposed to increase gradually in the coming future because of limited IT infrastructure cost associated with the implementation. The function segment may include finance, human resource, supply chain and others and the vertical could include major industries like manufacturing and service, healthcare, retail, government utilities, telecommunication and aerospace. The end-users segment in the ERP software market may include large, medium and small organizations. (González-Benito, Venturini and González-Benito (2017) mentioned about some leading manufacturer, which includes Oracle, IBM Corp, Microsoft Corp, SAP, Sage Totvs and SYSPRO. The following figure shows the potential markets of ERP and its growth of us.
Figure 2: Global ERP software market
(Source: Harwood 2017)
Figure 3: Global ERP software market based on the regions
(Source: Hwang 2015)
It has been identified that two greatly used deployment models in the ERP software market are on premise and cloud. Karim, Somers and Bhattacherjee (2017) mentioned that On-premise model compared to cloud model, usually accounts for the larger market size by value because it could allow in-house IT staff to enhance software application or customize it for a specific use of business. The above-presented graph helps to understand that manufacturing and service sectors keeps driving the ERP software market because it helps business to enhance their productivity and efficiency. Hence, Morton and Hu (2018) mentioned that one of the highest revenue generating segment is North America. According to market analysts, Asia-Pacific could be a major and leading ERP software market by 2020. Furthermore, ongoing growth as well as presence of multi-national level firms could provide several opportunities in the regions during a forecast timeline.
ERP modules may include a vast sections but among the stated EPR vendors such as Microsoft Dynamic, SAGE, Odoo and SAP ERP, on the basis of business or organization’s needs, forms the ERP systems. The major modules that are usually found in an ERP system designed by the stated vendors are: Human Resource, Inventory, Sales and Marketing, Purchase, Finance and Accounting, Customer Relationship, Supply Chain Management and Engineering and Production. For example, Human Resource module helps HR team of System Dry Cleaner for efficient management of human resource by managing employee information tracking employee records just like the performance reviews, determining the designations and tracking. On the other side, a significant sub-module in HR module could include Payroll System helping to deal with salaries, payment reports. Similarly, the inventory module can be applied to identify stock of items and the firm can identify this stock by unique serial numbers. As the business of System Dry Cleaners is supposed to expand due its increasing use of technology, with the help of this unique inventory system could keep track of items and trace its current location in business. Similarly, the sales module is more of a typical process include Sales Queries and Energy, accepting sales order, invoices along with proper taxation. This module also helps to keep a track of dispatch/shipment of materials and the pending sales orders.
The architecture of ERP system plays a great role in order to determine its success and durability for the organization. In today’s competitive business environment four major architecture for ERP system include Three-Tier Architecture, Web Architecture, SOA architecture and SOA Architecture. It is observed that Three Tier architecture remains as the scale up of the client server Two-Tier architecture. When implementing this architecture, Dry System Cleaner should use three layer presentation, Application and Database Layer. When applying this module, the business has to ensure that in Three Tier Architecture, the client usually does not communicate with the data base and as a layer of responsible for performing business logic needs to be developed and implemented. Moreover, this architecture needs to be developed in a way that presentation layer takes the responsibility for browsing the data and providing a user-friendly interface. This should allow the users to have less relevant and powerful machines. This system must have the function of revising the data, particularly in the application layer. The application layer should also hold the function of transferring data to the server after their revision of the day in the application layer.
Figure 4: Three Tier Architecture
(Source: Morton and Hu 2018)
Besides, the Three-Tier Architecture, another significant architecture is web-based and major goal of web-based architecture is to remove users to access the ERP system. A significant similar function of Web based Architecture is the same application and database layers as Three-tier architecture. However, the presentation layer could be divided into different layers namely web-services and web-browser to back up the mobility of the devices through internet. Pettit and Beresford (2019) commented that several institutes usually do not develop their ERP as a web-based architecture as the accessibility outside the business may not be a requirement at first; nonetheless, with the development of the institute, access from the remote areas could become a significant requirement. Notwithstanding, a web-enabled architecture remains as an architecture that is not particularly based but with additional new demands of changes are made to make it active and enable.
Figure 5: Web-based Architecture
(Source: Ptak and Schragenheim 2016)
On the other side, unlike the three-tier and web-based architecture, the SOA architecture is not particularly based on any specific technology or networking process. As out forward by Ram, Wu and Tagg (2014) Service-Oriented Architecture is a well-known approach implemented to generate an architecture on the basis of the use services. However, on the basis of the business functions and requirement of Supreme Dry Cleaner, it can be mentioned that Three-tier architecture ERP could be a suitable option. As three-tier architecture includes three different tiers starting from tier 1 architecture to tier 3 architecture. Tier architecture gives a clear picture of client systems and file server, while tier-2 architecture providing the image of client system in a row and database segment. This means there is clear flow of communication business and its client. So, when using the architecture,
Fit/Gap analysis helps to identify the appropriate cause of a problem; this is significant as not all business problems are caused by software. For the business of Supreme Dry Cleaner, there are certain areas that need to be controlled and managed by the ERP system. The following sections demonstrates the areas that should be aligned with the functions design of Three-Tier ERP architecture.
The stated requirements are identified on the basis of the current operation of Supreme Dry Cleaner. Analysis helps to find four major areas in the form of needs that can be addressed. On the basis of these requirements, it can be mentioned that Three-Tier module could be suitable and effective for the selected business as the database capacity of Three-Tier Architecture is comparatively higher than other two architecture ERP. In addition to this there are three more sub-sections found in three tier Architecture is such as client tier, Business logic tier and Database tier; thereby, the operator or the business may find it easy to keep an eye on each of its business sections.
It can be mentioned that ERP could be highly helpful to cope up with the dynamic environment as well as enhancing learning services. Even though, there is an optimal benefits of using Three Tier ERP system, but Supreme Dry Cleaner could find it easy to minimize the access time to analyse, manage and process the data, help to organize the overall data of the business and avoid data redundancy and operation with the use of common dataset. In order to enhance the efficiency of the work process and increase productivity, the organization needs to abandon its conventional paper use as it takes a lot time and slow up the business process. Thus, a technology based culture could help to speed up the process of work, which can be reflected on the overall productivity of the organization. In addition to this, there is a gap of communication between the departments of Supreme Dry cleaner; thereby, the organization needs to enhance its collaboration between the department, staff and customers. It is certain that by using an existing process, it could be difficult to enhance the collaboration. However, implementation of Three-tier architecture ERP model helps to address all these issues.
Conclusion
On the basis of this research, it can be mentioned that generalization of ERP system might not be possible as generalizing the ERP system might differ on the basis of the needs and requirements. Moreover, implementation of ERP often has an increasing failure rate; thus, the implementation should be done more precisely. Nonetheless. In spite of all these, the bossiness will still do good in implementing ERP system into its business as there are huge benefits associated with it.
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