ERP Technology for Small & Medium Enterprises (SME) Sector
Author: Subhajit Mazumder Consultant, PricewaterhouseCoopers subhajit_mazumder@yahoo.com Introduction Enterprise Resource Planning or ERP is an initiative to streamline business processes and integrate isolated business functions through the medium of a system which serves as a common platform for all. Genesis The need for ERP was felt by large corporations struggling to optimize their operations and cut overheads. There was a rigorous exercise to implement ERP and adhere to best practices in business processes suggested by systems such as SAP. Over a period of time most of the large enterprises had already implemented ERP and had started to reap the benefits of an integrated system. This was the time, when the need for ERP percolated to the small and medium sized enterprises who although did not carry the flab of large operations, nevertheless wanted to put in the right processes to achieve higher efficiency and profitability. Thus there was the advent of a host of mid-segment ERP products, which unlike the bigger ERP products claimed a shorter implementation life-cycle and promised flexibility to the SME organizations. As IT professionals and students of computing technology, it is worth noting the technology framework on which such ERP products run and out-perform the traditional resource hungry ERP systems. Many of these new sleek ERP systems are what is known as ERP II or ERP+ products which also encompass supply chain management (SCM) and Customer Relationship Management (CRM) along with necessary web extensions. [1] Technology Framework enabling Small & Medium Enterprises The challenges in implementing ERP in the SME Sector are: • The client organizations do have ample time and resources to dedicate for the implementation. Hence rapid implementation of the ERP helps such companies achieve better Return on Investment. • Every ERP product has built-in processes, but the SME Sector finds it difficult to adhere to some the best practices followed. Hence easily customizable solutions work better in this sector.
The technology base of these modern ERP systems conform to higher generation of programming languages and higher levels of abstraction and helps in meeting up to the challenges mentioned above. Most of these products conform to Object Technology, ranging from truly Object Oriented framework to Object Based framework. The products are either two-tier or three-tier with the ERP Application accessed by clients, Application Server (the middle tier) and the database. The technology framework enables rapid development and configuration of the ERP engine which adapts to the business logic and rules. The products usually have proprietary programming languages (e.g. ABAP in mySAP, C/AL & X++ in Microsoft Dynamics) but there is also an emerging initiative to align these products to standard development frameworks such as .NET and J2EE. The implementation of these ERP products enables the use of OOAD for Requirements Analysis and Systems Design. However the Design activity is usually minimal since the product vendors make available the product design to the implementation partners. SDLC cycle follows as in custom development projects with greater emphasis on functional testing. Conclusion The technological prowess provided by modern computing concepts incorporated in such modern mid-segment ERP products helps translate to providing a agile business solution to organizations who may not be as structured as large corporations. Factors where the underlying technology of the products helps in giving the edge of rapid implementation ability are: • Object modeling: both Object Oriented and Object based approaches enable rapid design • The IDE (Integrated Development Environment) of the products (MorphX and C/SIDE in the referred cases) help quick “less-effort” development • The Database Management activity is taken care of by the ERP applications which leads to less time spent on DBA activities • The applications provide a higher level of abstraction which brings the applications closer to the business objectives. The modern technology base serves as accelerator to project implementations and brings down the turnaround time leading to a higher Return on Investment from the product implementation. References: [1] www.technologyevaluation.com