Enterprise Resource Planning
Enterprise Resource Planning ( ERP ) describes the entrepreneurial task of planning, controlling and managing resources such as capital , personnel , operating resources , material and information and communication technology in the sense of the corporate purpose in a timely and needs-based manner. The aim is to guarantee an efficient operational value-added process and continuously optimized management of corporate and operational processes.
Is a core function of ERP for manufacturing companies, the material requirements planning (see also Material Requirement Planning , and manufacturing resource planning ) that ensure must that all materials required for the manufacture of products and components in the right place at the right time and in the right Quantity are available. Overall, the previous conflicting goals should be eliminated and achieved as performance features:
- High quality and high productivity
- High security of supply and low capital commitment
- Complexity reduction and flexibility
- High continuity and short lead times
Nowadays this task is mainly done with the help of IT systems based on modern information and communication technology .
ERP systems
An ERP system is a complex application or a large number of application software or IT systems that communicate with one another that are used to support the resource planning of the entire company. Complex ERP systems are often divided into subsystems (application modules) that can be combined with one another depending on the company's needs.
ERP systems differ mainly:
- according to the economic sector and the respective industry (manufacturing industry: steel industry , automotive industry , chemical industry , ...; services: trade , insurance , banks , health care , ...),
- according to the scalability to different company sizes (number of required users or company locations ),
- in the range of functions offered that should be supported ( production , materials management , sales , ...)
- and in the technologies used ( databases , programming languages , layer architectures , operating systems, etc.).
The trend can be observed that more and more providers are relying on web-based products. Here, for example, the system interface is displayed in a browser window. Among other things, this offers the possibility of accessing your own system from outside the company without having to install a graphical user interface . This means that suppliers or customers can be included directly in the business processes, for B. Placing orders, scheduling deliveries, etc. These possibilities mean a significant time and cost advantage.
The approach to look beyond company boundaries and act is the basic idea of ERP II systems. It also makes up the core of service-oriented architectures .
Basically, the need determines the available ERP providers. A large company must also be able to map its group structures via an ERP solution, if necessary, directly connect subsidiaries ( multi-client capability ) and requires a large number of complex, business functions. Despite the use of standard software, consulting and adaptation ( customizing ) cause higher implementation costs . In contrast to this, when using such a solution, for example SAP ERP or Oracle E-Business Suite, a compact procedure model must be selected in the implementation project of a small or medium-sized company ( SME ) and the adaptation must be restricted to the essential requirements. In addition to complex, highly integrated and universal ERP systems that can be adapted for many industries, industry-specific ERP systems with reduced complexity and functionality are also available to an SME .
Functional areas of an ERP software
ERP systems should largely map all business processes . Continuous integration and a move away from isolated solutions lead to a holistic ERP system in which resources can be managed company-wide. ERP systems also improve the flow of communication in the company and can make collaboration in the company more efficient in the sense of e-collaboration .
Typical functional areas of an ERP software are:
- Materials management ( procurement , warehousing , disposition ),
- Production or production planning and control ,
- Needs assessment ,
- Finance and accounting ,
- Controlling ,
- Human Resources ,
- Research and development ,
- Sales and marketing ,
- Master data management ,
- Parts list ,
- Product data management ,
- Document management
The size of the company often determines the requirements for the functional areas listed above as well as the available investment volume for hardware , licenses and implementation . So-called SMEs , for example, often do not need integrated controlling and accounting modules. In addition, different branches of industry sometimes have very different requirements for an ERP system. Thus, most of the large providers offer industry solutions , the partial packages of which are specially tailored to certain industries. Alternatively, the solutions of the over 100 smaller ERP / PPS providers in German-speaking countries are available, which are often not fully integrative, but are usually significantly lower in price. In addition, there are currently more and more free ERP systems that, with certain restrictions, are particularly suitable for smaller companies and newcomers. In the beginning, the term ERP primarily referred to PPS, but is now also used synonymously for merchandise management systems or project management software, which in addition to their actual functions also include financial accounting or CRM .
In recent years, the question of mastering the product variants has emerged as an important criterion in the area of production and sales, for which special ERP modules with specific methods and procedures must be available in the various functional areas of the ERP system. The products are produced less and less for an anonymous market in stock, but more and more manufactured according to actual customer orders. In the automotive industry, customers can configure their own vehicle. The variety of variants in the automotive industry requires special procedures for creating the production program and special methods in product data management (see also configurator ) and in the display of parts lists , which in turn affect the determination of requirements and the delivery schedules at the suppliers.
Development of the ERP software
The development of ERP systems began in the 1980s at the end of the last century in order to link the existing commercial application systems, which were often developed next to each other by different companies or departments / departments of a company, and to combine them into a holistic system. During this period, August-Wilhelm Scheer's computer-integrated manufacturing model was developed, which combines the technical and commercial processes in a computer-supported system. Many ERP systems have evolved from the Manufacturing Resources Planning system, which is either supplemented by other system modules, e.g. B. for sales , procurement , finance or human resource management , or existing system parts were expanded into independent EPR modules and integrated into the holistic ERP system. There was a further development at the end of the 90s through the approach of Advanced Planning and Scheduling , in which the modules were given more independence and could be combined with one another, making the ERP system more flexible and thus better adapted to the specific circumstances of a company or an industry could be. Due to Industry 4.0 , the ERP systems have to be further developed and change. On the one hand, certain ERP functions are no longer required and are being replaced by autonomous operating resources (e.g. autonomous mobile robots ) or by self-controlling systems (see cyber-physical system ); on the other hand, the concept of the digital twin is changing the procedures for planning, regulating and monitoring the processes. Due to the amount of accumulating and available data in the course of the expansion of Industry 4.0 (see Big Data ), new software tools such as data mining or machine learning are also used, which have to be integrated into the ERP system.
Introduction of an ERP software
The introduction of ERP software is a complex project for medium-sized and larger companies and can be divided into two phases, for example:
Evaluation
The right choice of ERP software depends to a large extent on the company's individual requirements. The level of awareness and market presence of a software can only provide a secondary indication of its individual suitability. First, an individual needs assessment should be made. Reference processes (best practice), which are compared with the company's own business processes, serve as support. On the other hand, the functional requirements resulting from the modeled processes can be supplemented by means of standard function catalogs. This first sub-project is often carried out independently by the company, but is sometimes supported by management or corporate consultancies . Important decisions for the further course of action are already made here. To determine requirements, some management consultancies offer methods from which specifications for software selection arise. For this purpose, the business processes of the respective company that would like to introduce the software are recorded and derived from what the software in question must perform. This requirement profile is transferred to a specification and published as such for the ERP provider. After a review of the market and inquiries to providers, who usually require the specification of specification-related degrees of fulfillment of the respective software, suitable providers are added to a shortlist of only a few (5–6) providers. In addition to the requirements from the specifications, other criteria can be included in the evaluation of the provider, such as B. the performance or economic potential of the provider / system house. The suppliers selected in this way are invited to present their product. The presentation should on the one hand provide an overview of the software, on the other hand it should also address the requirements of the company and, if possible, contain a specific task. Finally, the providers are assessed and selected according to previously defined selection criteria.
Implementation phase
The actual software implementation is usually also subject to the project sovereignty of the user company, but in practice it is often managed by the provider company or a service partner of the provider, as there is often a correspondingly high level of practical experience. In a first step, all of the company's business processes are analyzed. A decision is then made as to whether the process should be retained or changed as before. Only when all business processes and their interfaces have been modeled within the company or to suppliers and customers are these business processes mapped in the ERP software. Then all required data (master data) are recorded in the system or, if necessary, taken over from an existing system that is to be replaced. After training the users, several simulations of the business processes as well as a test phase and acceptance, the real operation of the ERP solution starts, analogous to the classic " waterfall model ", as it is used, for example, in software development.
Alternative introductory models
But there is also an approach to the introduction of ERP systems that is not based on this two-phase model, but uses methods from agile software development. With this approach, the iterative process model Scrum is used together with Extreme Programming to introduce individual parts of the ERP system step by step. After each development step, the results are then validated and improved.
In times of digital transformation, there are also other implementation models that take into account the constant change and changes in business models and business processes. With the QITT model such as a carried Q ualifizierung the initial requirements, I MPLEMENTATION of the ERP system (Scrum or waterfall), T -training of the employees on the basis of the new system, and real data in a test system and a subsequent recurring process of T ransformation of the software to the permanent changes caused by digitization.
Commercial ERP software
The world's largest providers of ERP software are:
| providers | Sales 2006 (million $) |
Sales 2007 (million $) |
Market share 2008 | |
|---|---|---|---|---|
| 1 | SAP | 5,730.1 | 5,732.3 | 26.8% |
| 2 | Oracle | 2,608.3 | 2,718.9 | 12.7% |
| 3 | legend | 1,459.5 | 1,695.7 | 7.9% |
| 4th | Infor | 1,239.6 | 1,312.6 | 6.1% |
| 5 | Microsoft | 778.9 | 795.9 | 3.7% |
| 6th | IFS | 260 | 270 | 3.1% |
| 7th | Agresso | 160 | 199 | 2.2% |
The largest providers in Germany by turnover are:
| # | providers | Market share 2006 | Market share 2008 |
|---|---|---|---|
| 1 | SAP | 54.8% | 51% |
| 2 | Infor | 5.5% | 5% |
| 3 | Microsoft | 3.8% | 6% |
| 4th | legend | 2.9% | 4% |
| 5 | Oracle | 0.9% | 3% |
| 6th | Exact software | 0.7% | |
| 7th | IFS | 0.4% | |
| 8th | Lawson software | 0.4% | |
| 9 | Agresso | 0.3% | |
| 10 | Hyperion | 0.3% |
The largest providers in Germany by distribution are:
| # | providers | Market share 2011 |
|---|---|---|
| 1 | SAP | 48.1% |
| 2 |
Microsoft Dynamics NAV and Microsoft Dynamics AX |
together 21.5% |
| 3 | Infor | 9.0% |
| 4th | Oracle | 6.1% |
| 5 | proALPHA | 5.8% |
| 6th | APplus | 5.1% |
| 7th | abas Business Software | 4.9% |
| 8th | Epicor | 4.4% |
| 9 | SoftM | 4.1% |
| 10 | legend | 4.1% |
Free and open source ERP software
For several years there has also been open source or even free ERP. Free ERP software can be installed and used by companies themselves. However, there are also system houses that have specialized in free ERP programs and provide paid services based on this software.
The advantages of a free system are, on the one hand, the ability to adapt the program to your needs or to fix errors. Since free software is mostly available free of charge nowadays, there is also often a reduction in the investment volume. The resulting freedom within the budget can be used more intensively for the most necessary adjustments. In addition, a license-free system is neutral in relation to the length of the chosen implementation schedule, since no costs are incurred over time. As a consequence of the investment, the arbitrary and, in principle, free scalability of the system is an advantage (apart from indirect costs such as the provision of the infrastructure, which must be taken into account for all such installations). Depending on the license, expansions, adjustments and solutions for recurring tasks from the corporate environment can flow back into the system. In the course of time, all users of free ERP software can benefit from it.
From a technical point of view, free ERP systems are quite competitive, but when choosing them, questions of liability as well as further development, maintenance and service are important. Due to the general availability of the source code , free ERP systems generally offer the greatest possible independence from the manufacturer and thus, at least in theory, greater security for the future, which depends exclusively on the long-term benefits of the providers and users. Theoretically, because in practice only a small number of users are able to make changes to the software themselves or to pay others for them.
For examples of ERP software systems with open source code, see the category: Free Company Information System .
Customizing / adaptability
ERP systems are theoretically based on industry best practices and their manufacturers intend that companies use them “as is”.
ERP customers have various options for dealing with possible existing gaps in standard ERPs and weighing up the advantages and disadvantages. Technical solutions include rewriting part of the software supplied, writing a self-developed module for the purchased ERP system or connecting it to an external system. These three options represent different degrees of system customization - the first being the most invasive and costly. Alternatively, there are non-technical options such as changing business processes or guidelines in order to better coordinate the provided ERP functionality.
Advantages of ERP customizing include:
- Improves user acceptance
- Offers the potential to gain a competitive advantage over companies that only use standard features
Disadvantages of ERP customizing can be:
- More time and resources needed for implementation and maintenance
- May prevent a seamless interface between suppliers and customers due to differences between the systems. [16]
- Restriction of the future upgrade ability of the ERP software
- Creates an excessive dependence on customizing and negates the principles of ERP as a standardizing software platform
- Threats the reliability of the system
Balance sheet tax assessment
A BMF letter has been available since November 18, 2005 for the assessment of expenses for the introduction of a business software system (ERP software) for tax purposes .
Strategic assessment
In the context of a company's strategic planning , an assessment must take place as to whether the introduction of an ERP solution generates a competitive advantage for the company. Nowadays, for large companies, an ERP no longer represents a competitive advantage, as most industrial companies now use one. As a result, the use of an ERP system is more of a hygiene factor, i.e. H. with the system you are no better than the competition, but without it you are worse.
It is important that ERP software only becomes a strategic competitive advantage if the company processes are coordinated with the software and, on the other hand, existing company processes can be integrated into the software. It is not the software itself that brings added value, but the responsible and careful use of it.
See also
- E-business
- Enterprise application integration
- Invoicing
- Mass customization
- Operations Research (OR)
- Human Resources Information System (HRIS)
- Project management software
- Overview of COPICS from 1972
- Enterprise software
- Merchandise management
- Workflow management
literature
- Axel Winkelmann: ERP-Podcast.de - weekly, largest German-language podcast for business software. http://www.erp-podcast.de also z. B. on itunes or spotify .
- Anja Schatz, Marcus Sauer, Peter Egri: Open Source ERP -Reasonable tools for manufacturing SMEs . Ed .: Fraunhofer IPA, MTA Sztaki. 2011 ( fraunhofer.de [PDF]).
- Jörg Becker, Oliver Vering, Axel Winkelmann: Software selection and implementation in industry and trade. Approach and experience with ERP and merchandise management systems . Springer-Verlag, Berlin / Heidelberg / New York 2007, ISBN 978-3-540-47424-1 .
- Fandel, G., Gubitz, K.-M: ERP systems for industrial, commercial and service companies . Ed .: ERP market study. 1st edition. 2008, ISBN 3-9805756-2-4 .
- Gronau, Norbert: Enterprise Resource Planning - Architecture, Functions and Management of ERP Systems . 2nd expanded edition. 2010, ISBN 978-3-486-59050-0 .
- Herlyn: PPS in the automotive industry - production program planning and control of vehicles and assemblies . Hanser Verlag, Munich 2012, ISBN 978-3-446-41370-2 .
- Jean-Baptiste Waldner: Principles of Computer-Integrated Manufacturing . 1st edition. John Wiley & Sons, 1992, ISBN 0-471-93450-X .
- Axel Winkelmann, Ralf Knackstedt, Oliver Vering: Adaptation and development of merchandise management systems - an exploratory study . Ed .: Jörg Becker. Trade Study No. 3 . Münster 2007 ( uni-muenster.de [PDF; 543 kB ]).
- Joachim Berlak: Methodology for the structured selection of order processing systems . Utz-Verlag, Munich 2003, ISBN 3-8316-0258-1 .
- Tobias Hertfelder, Philipp Futterknecht: The ERP misconception in medium-sized companies . 1st edition. Springer, Heidelberg 2019, ISBN 978-3-662-59143-7 .
- Hartmut Stadtler, Christoph Kilger (Eds.): Supply Chain Management and Advanced Planning - Concepts, Models, Software and Case Studies . Springer-Verlag, Heidelberg 2010, ISBN 978-3-540-67682-9 .
- W. Herlyn, ERP and Industry 4.0 , in: ERP-Management 4/2019, pp. 26-29, GITO-Verlag, Berlin, 2019
Web links
- Gabler Business Lexicon [1]
- Journal and online information on ERP systems
Individual evidence
- ↑ Bernd Ebel: Production Management . NWB Verlag GmbH & Co. KG, Herne 2002, ISBN 978-3-470-53353-7 , p. 204 .
- ↑ Herlyn: PPS in the automotive industry . Hanser Verlag, Munich 2012, p. 145 ff .
- ^ August-Wilhelm Scheer: CIM Computer Integrated Manufacturing: The computer-controlled industrial enterprise , Berlin: Springer, 4th, neubearb. u. exp. Edition 1990
- ↑ W. Herlyn: ERP and Industry 4.0 , in ERP Management, 4/2019, GITO Verlag, 2019
- ↑ Bernd Zuther: Agile methods for the introduction of an ERP system using the example of an internet agency . Akademikerverlag, 2012.
- ↑ Worldwide ERP Applications 2006 Vendor Shares: Top Vendors in Small Medium-Sized and Large Customer Segments .
- ↑ Gartner (June 2009): ERP Software Revenue, Worldwide, 2006–2008 , quoted in: Unternehmenspresentation Sage Software GmbH. (PDF; 10.6 MB) Retrieved May 29, 2011 .
- ↑ Gartner, quoted in: 2007: In the market for ERP, CRM and SCM solutions, medium-sized companies are the driving force. In: Computerwoche . September 28, 2007, accessed December 19, 2008 .
- ↑ The German ERP market remains fragmented. (No longer available online.) In: Computerwoche. August 12, 2009, archived from the original on July 21, 2010 ; Retrieved July 7, 2010 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Konradin ERP study 2011: Use of ERP solutions in industry. In: Industrieanzeiger. March 2011, accessed June 26, 2013 .
- ↑ Pernille Kraemmerand, Charles Møller, Harry Boer: ERP implementation: An integrated process of radical change and continuous learning. In: Production Planning & Control. 14, 2010, p. 338, doi : 10.1080 / 0953728031000117959 .
- ↑ Inca Heidi Vilpola: A method for Improving ERP implementation success by the principles and process of user-centered design. In: Enterprise Information Systems. 2, 2008, p. 47, doi : 10.1080 / 17517570701793848 .
- ↑ a b Fryling, Meg: Estimating the impact of enterprise resource planning project management decisions on post-implementation maintenance costs: a case study using simulation modeling . In: Enterprise Information Systems . tape 4 , 2010, p. 391-421 , doi : 10.1080 / 17517575.2010.519785 .
- ↑ Fryling, Meg (2010). Total Cost of Ownership, System Acceptance and Perceived Success of Enterprise Resource Planning Software: Simulating a Dynamic Feedback Perspective of ERP in the Higher Education Environment . ProQuest Dissertations and Theses database. p. 403. ISBN 978-1-109-74428-6
- ↑ a b Bradford, M. (2015): Modern ERP: Select, Implement, & Use Today's Advanced Business Systems . S. 107-108 .
- ↑ File number IV B 2 - S 2172 - 37/05 before. Published in Der Betrieb 2005, pp. 2604–2606
