Enterprise Resource Planning (ERP) Systems: Design, Trends And Deployment

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The International Technology Management Review, Vol. 5 (2015), No. 2, 72-81Enterprise Resource Planning (ERP) Systems: Design, Trends andDeploymentDania Mahmoud BahssasDepartment of Information SystemsFaculty of Computing & Information TechnologyKing Abdulaziz University, Jeddah, Saudi ArabiaEmail: dbahssas@hotmail.comDr. Adnan Mustafa AlBarDepartment of Information SystemsFaculty of Computing & Information TechnologyKing Abdulaziz University, Jeddah, Saudi ArabiaEmail: ambar@kau.edu.saMd. Rakibul Hoque*Department of Management Information SystemsFaculty of Business StudiesUniversity of Dhaka, Dhaka-1000, BangladeshEmail: rakibul@du.ac.bdAbstractThe Enterprise Resource Planning (ERP) system is a famous widespread solution in businessorganization which is used and verified the integration and automation of the processes,performance improvements, and cost reduction. However, new innovations in technology trendsthat forced ERP designers to go with the new development. Therefore, new ERP system designswere done to satisfy companies and/or customers by evolving new ERP business models.Moreover, one of the biggest challenges for ERP is to keep speed with a manufacturing sectorthat has been rapidly moving from product-centric to customer-centric focus. This changerequired most ERP vendors to add a variety of functions and modules on their core systems,while the basic design of most ERP systems remained product-centric. In this paper, we discusssome of the promising new ERP evolutionary design and models that could affect the future ofERP systems and open new market for next generation customers.Key words: Enterprise Resource Planning (ERP), ERP Design, ERP Architecture.1. IntroductionBusiness environment is changing over the years, thispace of change continues to accelerate and companiesall over the world seek to response to new customerneeds and reach higher market opportunities.1Successful companies today recognized the need ofintegrated systems that can improve their quality,customer satisfaction, performance, and profit.Organizations and companies can make this vision*Corresponding author: Cell: 8801912928171.Email: rakibul@du.ac.bdPublished by Atlantis PressCopyright: the authors72

Bahssas, AlBar and Hoquepossible through Enterprise resource planning (ERP)systems. Enterprise resource planning (ERP) is businessmanagement software that is designed to integrate datasources and processes of an entire organization into acombined system.2 It gives organizations and companiesan incorporated real-time view of its core businessprocesses such as production, planning, manufacturing,inventory management, and development.ERP software is super multi-module applicationsoftware that integrates activities across functionaldepartments such as production planning, purchasing,inventory control, product distribution, and ordertracking.3 In addition, it allows automation andintegration of business process by enabling data andinformation sharing to reach best practices in managingbusiness process. ERP have different modules that runvariety business activities such as accounting, finance,supply chain, human resources, customer informationand many others.2. History of ERPERP systems were used since 1960's and at thebeginning, companies wanted a solution to control theirinventory control systems by using Inventory controlpackages (IC). Then, in1970's Material RequirementPlanning (MRP) Systems where developed for productsplanning followed by Manufacturing Resource Planning(MRP II) Systems developed in late 1980's to emphasisoptimized manufacturing processes to form a characterbased ERP. 4 In 1990, based on MRP and MRP II, ERPsystem where developed as Client/Server ERP tointegrate business processes such as manufacturing,distributions, accounting, finance, human resources, ,inventory management, and project management. 5In small words, between 1990 and 1999, ERPconcept was based on materials planning, old entry,distribution, accounting, and shop floor control. In2000, ERP vendor implement ERP system by addingmodules and functions to have extended ERP (ERP II)system focusing on integration, transformation, andcollaboration in the business value chain. 6 New conceptof ERP was proposed in 2001 to be internet basedenvironment. In 2004, Services Oriented Architecture(SOA) becomes a standard that ERP vendors worktowards. SOA software architecture allows differentsystems to communicate with each other.7 In 2005,Industry consolidation occurs between companies suchas oracle, Microsoft, Infor, and Sage. Extended ERP,between 2000 and 2005, was based on scheduling,forecasting, capacity planning, warehousing, andlogistics. Furthermore, as business entered 21st centurythe idea of extended ERP converted to be moresophisticated concept that includes all functions thatwas outside ERP such as knowledge management,project management, workflow management, ment, and integrated financials.83. ERP MarketIn the early sixties, at the beginning SAP capitalized oninnovations in client-server computing to be the leaderin the ERP market. Later, database standardization byOracle and Microsoft had a great impact on enterprisemodules integration such as CRM. In addition, thebeginning of web based software (SaaS) made adecrease in ERP system deploy cost and made ERPsystem to become the latest enterprise application to beavailable as a cloud. SaaS simplified the adoption ofERP and the extensibility of existing deployments.9ERP Market is dominated by large vendorsincluding SAP, Oracle, and Microsoft. Many ERPvendors had a strong presence among small to mid-sizedenterprises market such as Sage, SAP, Oracle,Microsoft, Dynamics, NetSuite, Epicor, UNIT4Business Software, and Openbravo. ERP market vendorlandscape where based on business size categorieswhich are: vendors serving large businesses such asOracle and SAP that provide ERP software for multilanguage, multi-facility, billion-dollar enterprises,vendors serving mid-sized businesses such as Infor,Sage, and Epicor, and vendors serving small businesseswhere Epicor are the front runners in this segment.104. Traditional ERP DesignAs old technology trends supported ERP design,architecture, and framework, therefore, Traditional ERPdesigns were implemented and made a conceptualframework for next-generation and future ERP systems.This section explains various ERP architecture design,technology used, issues, and challenges in eacharchitecture design.4.1. Two-tier (client/server) architectureERP architecture design was based on client/Serverprocessing which means that processed work will bePublished by Atlantis PressCopyright: the authors73

Enterprise Resource Planningdivided between two computers Client and Server.Client is the presentation logic for users while Server isthe processing and storage logic.11 This design wasnamed Two-tier architecture. The following figureshows Two-tier architecture:Client PCadvantage added to the architecture design. Three-tierarchitecture is more scalable, reliable, and flexible. Itprovides easier implementation to reusable components.On the other hand, Three-tier architecture has a complexand a bit expensive design. Three-tier architecturedesign was used by SAP vendor named SAP R/2, alsoEpicor, Oracle, and Microsoft used it.Central ServerFigure 1: Two-Tier ERP architecture 11Before Two-tier appeared, Single-instance ERPsystems were used. Single-instance ERP was veryexpensive and takes too long to arrange organizationalchange with business models, competitive pressures,needs and global customer demands. Therefore, two-tierERP made a business solution at that time. It introducednew ERP that was a bit lower in cost, higher inprocessing, and direct in communication. However,Two-tier ERP had lots of drawback such as performancewill decrease as number of clients increase, no databasechange or modification can be added and limitedflexibility in functions movement from server toanother.12 Two-tier architecture design was used bymany vendors such as Epicor, NetSuite, Openbravo,SAP, and Microsoft.4.2. Three-Tier architectureThree-tier ERP architecture was introduced as a solutionfor two-tier ERP problems. It consists of three layerssuch as Presentation layer (Graphical User Interface(GUI)), Application layer, and database layer.Presentation Layer is where data is presented for clients.Application layer is responsible for distributing requestsacross different applications servers and for businesslogic execution.13 Furthermore, Application layer acts asan interface that facilitate communication betweenDatabase layer and User interface (presentation layer).Database layer is responsible of data storage, edit, add,and delete.Three-tier architecture presents new technologiessuch as database server and its ability to modify datawithin server. In addition, Application serverdistribution among varies applications in also a newFigure 2: Three-tier architecture 134.3. Web-based architectureWith entrance of internet widely in technology world,ERP system developer improved ERP system to coopwith internet and web changes. Web based ERP designfocused on new technology arises and on migration fromClient/server architecture to web-based client/serverarchitecture. It is consists of three layers user interface(web browser), web server, and application/data server.14User interface layer moved from GUI interface to webbrowser interface. Web server is responsible for HTML,and ASP transactions and act as a gateway betweenApplication/data server and user interface (web browser).Web application/ data server is responsible for applicationdistribution and database storage. The following figurerepresents web-based architecture:Figure 3: Web-based architecture 14Published by Atlantis PressCopyright: the authors74

Bahssas, AlBar and HoqueWeb-based architecture has multi-tier client-serverarchitecture as shown in Figure 3. The Web browser isthe user interface (client), while the Web server readsand answers the client requests by sending back Webpages. Distant applications and databases can beaccessed by the browser through a Web server gateway.Middle-tier communication software layer is performextracting and sending parameters passed through theHTTP protocol to the remote application and formattingthe results into Web pages.15Web-based architecture introduced web-basedsystems technology that was used for the first time inERP systems and introduced new Web-based ObjectOriented Model (WOOM). This new technology allowssystem-to-system integration that facilitates processesbetween multiple systems. In addition, Web-basedarchitecture reaches higher performance because of webserver layer that integrate ERP applications withexisting systems and web browser. This architecturedesign makes faster client/server response, improve dataintegrity, perform easier modifications, and higherflexibility.16 Web-based architecture main drawback issystem security and internet security. Web-basedarchitecture design was used by SAP named SAP R3,also used by Microsoft, Oracle, NetSuite, and manyother vendors that tried to use and implement their ERPsystems based on it.5. TechnologiesdevelopmentandtrendsaffectingERP5.1. Web technologiesOver the old century, ERP begin as a system that onlylarge manufacturing companies can implement. ThenERP moved and spread to smaller companies in allareas and sectors like retail, distribution, healthcare, andgovernment. This is because of web and webtechnologies that place the foundation stone of ERPdevelopment into web ERP.17 They enabled ERP to bemore dynamic and customer-centric. In addition, manyonline services were established such as e-commerceand e-business. These web services supported ERP tocontribute in web business and move to be web basedsystem.implementation of the system in all ERP history.Programming language is the transformation key ofERP on which the development of it positively affectsERP growth and improvement.18 In addition,programming language is the element that made ERPprogress from Client/Application to Client/ Serverintegrated system. Through the enlargement ofprogramming language to web programming such asXML, PHP; ERP implemented new versions thatsupport web services and applications.5.3. Web-based SystemNowadays, internet has affected companies andorganizations life on which manufacturing enterpriseneeded to reshape their working models in order toreach competitive advantage in global manufacturing.Enterprise Resource Planning (ERP) became morecritical by adding new internet model. Internetimplemented new ERP model which is Web-basedObject-Oriented Model (WOOM) which is usinginternet component and technology as object orientedmodels for quicker, faster implementation andcustomization. WOOM made a new generation of ERPcalled web-based ERP.19 In addition, WOOM madeERP system defined in term of objects that isrepresented under object oriented method based on realworld entities such as organizations, events, orindividual role.Web-based ERP system has the capabilities ofinternet access and real time information that resultmore efficient and accurate business. Moreover, Webbased ERP provide companies data about supply chainand help facilitate e-commerce transactions. The figuredown represents old ERP Three-Tier Design beforeimplementing Web-based ERP:5.2. New programming LanguageThroughout ERP development, programming languagewas the most important part of development andFigure 4: Traditional N-Tier ERP 18Published by Atlantis PressCopyright: the authors75

Enterprise Resource PlanningThe figure down represents new ERP Design afterimplementing Web-based ERP:Web servercloud such as servers. SaaS means its buying or rentingservices over the cloud such as storage or software's.SaaS is used in cloud ERP on which it takes theresponsibility of organizing and managing ITinfrastructure (such as servers, operating systems,databases) and processes that are required to run a fullsolution.22 Cloud ERP has many advantages which areless staff, Mobility, easy expandable, cost reduction,and fewer expenses. Business challenges and customerneed for cloud technology made Cloud ERP on demand.5.6. Security issuesFigure 5: Web-based ERP195.4. Mobile ApplicationsThe increase in mobility users made enterprises figureand recognize the importance of extending their ERPsystem to mobile applications that provide employeesinternal system access while mobility. Mobile ERPapplications transformed the way businesses engagewith customers, partners, and staff by using inventedapplications that enhance and accelerate the exchange ofcritical information.20 It has many advantages whichare: improve quality of service, reach greaterproductivity, wider business relationship and customerengagement, competitive advantage, and alwaysaccessible. Nowadays, most ERP vendors have mobileapplications such as SAP ERP system. SAP vendorrecently developed mobile business suite applicationthat makes easier access mobility.5.5. Cloud ComputingCloud computing is a network based service model thatenable on demand network access to a shared pool ofconfigurable computing resources such as servers thatcan rapidly entered. In addition, it is a model thatprovides special services over the internet; this servicecould be server, storage, or software. The entrance ofthis technology made a quick change in ERP systems onwhich ERP vendors started to implement their ERPsystems based on cloud computing models and services.Cloud ERP is hosting an ERP system over the cloud.21This hosting is done through two models IaaS(Infrastructure as a service) and SaaS (Software as aService). IaaS means buy need Infrastructures over theERP is becoming a wider solution that’s used by smalland large organizations and industries. The introductionof ERP into web (web-based ERP), mobile, and cloudmade a complex configuration of security issues. This isbecause of ERP complicated structure that offerssecurity mostly available inside the company.23Furthermore, ERP framework and architecture containsdifferent vulnerability in all the levels from network toapplication. This means that ERP need to add securitymodules to all architecture levels in order to reachcompatible security.5.7. In-memory ComputingSAP ERP system defines in-memory computing as" anew technology that enables the analysis of very largenon-aggregated data at unparalleled speed in localmemory".24 In-memory computing technology mainfocus is to store data in primary column format that cancompress and store huge amount of information in mainmemory. Furthermore, this technology facilitate parallelprocessing in multi core architecture by movingintensive data calculations from the application layerinto database layer that end up with faster processing.In-memory technology arise made ERP vendors chose itas a solution that improve their ERP systems. SAP isone of those vendors who invented a new ERP systemthat support in-memory computing.6. Framework of new ERP DesignAs business environment is dramatically changing,companies today face the challenge of increasingcompetition, expanding market, and raise theircustomers’ expectations. ERP system play an importantrole in any business environment wither it’s a small,Published by Atlantis PressCopyright: the authors76

Bahssas, AlBar and Hoquemedium, or large organization. Recently most ERPsystem developers and vendors are trying to implementand expand their ERP systems.25 This is because; newERP systems implementation will reduce generaladministrative cost, get better resource utilization, willreduce wastes, reduce decision making time, and reduceoperational cost. Furthermore, new ERP systemimplementation means new or more ERP modules willbe added and supported by the system. ERP developersduring implementation focus on new systemperformance and cost reduction also on user friendlyinterface, secured information, efficient and enhancedtechnology. These new systems were based ontraditional ERP system architecture design such as webbased architecture.6.1. New ERP designs:Rapid development of information technology supportedthe movement of ERP to next generation andimplementation of new designs. ERP help enterprisesystems to change their traditional management methodsand offer them more benefits and profits for theenterprise. Most Traditional ERP systems were basedon Client/server or browse/server model architecturewhich is three-tier architecture design. However, the fastdevelopment of technology and information systemscreated six-tier ERP, Cloud ERP, and Mobile ERPwhich will be explained in the following sections.component layer which support final system resultshown to the users. Server section contains four layersthat also support each other's. Data access layer (DAL)primarily responsible for original data receive and send,it support business logic layer. Business logic layer(DLL) focuses on domain logic and system implementassociated with business need and business processimplementation. Data service layer (DSL) mainresponsibility is to get data from business logic layer orget data from data mapping layer to be processed bybusiness logic layer. In addition, this layer can makedecoupling between the data application of the upperlevels and the data access and the data handling of thebottom. Data Mapping Layer (DML) main function is toconstruct communication among the data elements oftwo different data models. Its final mission is to reachdata integration.ClientApplication Layer (AL)Components Later (CL)ServerData Mapping Layer (DML)Data Service Layer (DSL)Business Logic Layer (BLL)6.2. Six-tier ERPAs three-tier ERP architecture had lots of deficiencies,six-tier architecture design combines three-tierarchitecture design and added its own new models. Sixtier architecture consists of six which are: data accesslayer (DAL), business logic layer (BLL), data servicelayer (DSL), data mapping layer (DML), componentslayer (CL), and application layer (AL). The followingfigure shows six-tier architecture design:The figure 6 shows that the system is divided intotwo sections; client and server. Client section containsApplication layer and component layer. Each layer hasits own function that supports the other layers.Component layer is responsible for data availability fordata mapping layer and data handling based on logicrelationship between modules. Application Layercontains different components that are providedData Access Layer (DAL)DatabaseFigure 6: Six-tier architecture26Six-tier architecture showed great solutions to lotsof three-tier architecture problems. In six-tierarchitecture the main focus was to make sure that theclients only see the application and components layerwhile other layers are transparent to clients and users.Traditional/three-tier system architecture was developedfor windows PC system but technology developmentforce systems to migrate from one hardware or softwareplatform to another.26 System migration cost used to bevery high. In six-tier the architecture of separatedPublished by Atlantis PressCopyright: the authors77

Enterprise Resource Planningapplication layer from the other layers solve migrationproblems effectively. This will improve platformtransplantation and system integration. As a result, thiswill reduce system development and maintenance costthat’s caused by system migration. Six-tier architecturesolved one of the biggest problems in three-tierarchitecture which is providing system decoupling.System decupling reduce maintenance cost and makethe system more flexible and make system componentsless dependable on each other's. Six-tier architecture canmake components-based development on which any twoor more components later components can form a newapplication system based on business logic orrequirements.6.3. Cloud ERPERP system plays an important role in anyorganizational development. This development will bemore reachable when ERP systems are up-to-date withlatest technology. Cloud computing entrance made acomplete change in enterprises or organizations usingERP systems. ERP moved to cloud ERP because of itsimprovements, benefits, and flexible system features.Cloud ERP is an approach to enterprise resourceplanning that use cloud computing platforms andservices to make business process transformation moreflexible.27 In this approach there are three importantlayers that do cloud services which are Infrastructure asa service (IaaS), Platform as a service (PaaS), Softwareas a service (SaaS), and Hardware as a service (HaaS).There are other terms that are used nowadays to namedifference resources provided as a service in the cloudsuch as XaaS. The following figure shows cloud layers:Cloud modules layers are modeled to adaptsoftware applications such as ERP systems.Implementing these models in ERP systems will makeorganizational change from financial and operativeperspectives. SaaS module offer low initial cost, low ITresources, low time spent on implementation. Itfacilitates ERP system work and makes it faster andeasier to be developed and implemented. By using SaaSmodule users or clients will get software service thoughinternet connection without the need to downloadmassive software or infrastructure.28 They only need torent web-based software from a service provider onwhich it is responsible for the operation.Cloud ERP system offer customers to use differenttypes of cloud; which are public cloud, private cloud,and hybrid cloud. Public cloud can be accessed bydifferent users where they share common software,hardware, and database. Private cloud can be accessedby specific user and flexible to ass specific features to it.Private cloud usually it is more secure, offer betterquality of services, and better data control. Hybrid cloudis a combination of public and private clouds but ondemand. Cloud ERP has many advantages such as lowerimplementation cost, energy, and maintenance cost. Itselasticity and flexibility is one of the major advantages.29In addition, it offer easy implementation to customerneed and features, resource sharing and allocation todifferent users. Cloud ERP made easy migration to newtechnologies and software’s provided and makes asimpler cloud-based application that can be usedremotely by users. Cloud computing has been used bymost vendors of ERP system and each vendorimplemented their own cloud ERP design. Vendors suchas plex system, NetSuite, Epicor, Oracle, Infor, SAP,Microsoft, QAD, IQMS, Sage, and ProcessPro. All ofthese vendors have implemented their Cloud ERPsystem depends on their needs and clients or customersneed.6.4. Mobile ERPFigure 7: Cloud Layers27Mobile computing technology has transformed the waytoday's businesses are done. It made businesses meettheir requirements, strategic advantages, and reachcustomer satisfaction. In many real life cases quickaccess to data and information's facilitated organizationsor enterprises work and implementation. Mobilecomputing has become more popular area where mostPublished by Atlantis PressCopyright: the authors78

Bahssas, AlBar and HoqueERP developers and vendors moved to use it. The maingoal of mobile ERP is to make all ERP functionalitiesavailable on various mobile phones and wirelessdevices. A Mobile ERP major technical requirement isinformation presentation in multiple formats. This isbecause mobile and wireless devices are established tosupport different browsers that support various mediaformats.20 Accordingly, it is necessary to transport thecontent in different markup languages such as WML,XHTML or HTML. Mobile ERP architecture use XMLto store data which facilitates data exchange andtransformation to other formats. Mobile ERParchitecture is divided into four tiers. Tier one: is ERPsystem database tier. Tier two: is content access engine,cache storage, and Remote Function Call (RFC) Servertier. This tier is responsible for queries building dependon mobile users request and data retrieve in XMLformat. RFC server is used to enable begging businessfunctions of an ERP system remotely. Tier three: iscontent extraction engine. This tier takes charge topresentation logic and determines type of browsers usedby user's mobile devices. Tier four: is the user interfacetier where it encompasses different mobile devices suchas WAP-enabled phones, and PDAs with their particularbrowser and GUI.Mobile ERP exceeds the technology boarders,becoming a pattern that provides the enterprise withclear strategic business advantages, real time businessability and in an event driven environment. Mobiledevice improvements and wide wireless bandwidthopened a new door to traditional efficiency andproductivity enhancements, cost reductions, and highuser satisfaction.Nowadays, ERP vendors moved to used anddevelop their ERP system under mobile computingtechnology. Microsoft, SAP, and Oracle vendors are themost powerful ERP systems that implemented theirsystems into mobile computing technology. Theydeveloped Mobile ERP systems because of its utilizeddevelopment tools. Furthermore, it makes an easier andquicker to get ERP solutions into the indicators of themobile workforce.307. DiscussionThis paper shows the importance of ERP in providingbusiness solutions for the Enterprises. It indicates howERP implementation went through many stages overyears and how it was used by large vendors. Technologyplayed an important role in ERP development andimplementation. It made radical changes in ERP marketto be wider and accessible. Every release of newtechnology, ERP developers coop with it and develop anew system architecture design based on the technology.The major idea of the paper is to specify new ERParchitecture designs and vendors that used it. It wasshown that Six-tier ERP architecture is the latest ERParchitecture design along with could ERP and MobileERP systems. ERP architecture designs now are moreflexible, on hand, faster, low cost and easier toimplement. They provided a great solution to ERPlegacy systems architecture. In terms of development,the increasing complexity of business informationsystems, the need for rapid adaptation to differentdevices and integration of business concepts are all goodreasons of ERP development. As a result, ERP hasgrown to cover all core business functions for bothprivate and public sector. Moreover, ERP turned to bemore modular and moved to be application that’saccessed remotely.8. ConclusionFigure 8: Mobile ERP Architecture 20This paper discussed the evolutionary design, trends anddeployment of ERP systems. ERP systems are based onmulticore parallel computing that facilitates and smoothERP functions. Web technologies and web servicessupported ERP development and migration. ERPthrough years moved from traditional ERP (MRPsystems) to move it to cloud and mobile ERP systems.Technology trends development and vendors adaptationsmoved ERP to new business world full of success andPublished by Atlantis PressCopyright: the authors79

Enterprise Resource Planningrealization. Nowadays, business software companies canpush the edge of large scale of online transactionsprocessing that ERP can run smoothly. ERP system nowcan run millions of transactions per seconds. This studywill help the developer of ERP to identify the model thataffect the future of ERP systems and open the newmarket for next generation. Furthermore, this study ioners, researcher, developers and users of ERP.Although our study is an important addition to theliterature, we also acknowledge its limitations, mainlythe qualitative approach. In the future, it is required toconduct more quantitative research for deeperunderstanding of users’ needs and thoughts.Conflict of InterestThere are no known conflicts of interest.References1. Czinkota, M., & Ronkainen, I. (2012). Internationalmarketing. Cengage Learning.2. Klaus, H., Rosemann, M., & Gable, G. G. (2000). What isERP?. Information systems frontiers, 2(2), 141-162.3. Madurapperuma, T

with internet and web changes. Web based ERP design focused on new technology arises and on migration from Client/server architecture to web-based client/server architecture. It is consists of three layers user interface (web browser), web server, and application/data server.14 User interface layer moved from GUI interface to web browser interface.

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