The main modules of erp systems. ERP systems: what is it in simple words, the pros and cons of ERP, an overview

The group of criteria "needs of the organization" may include:

• Compliance with the business processes of the organization. An ERP system should be able to be customized to the organization's processes. This criterion determines the flexibility of the system in case of changes in the company's activities.
• Scalability. An ERP system should allow replicating solutions for several departments or several types of company activities. Also, it should be able to adapt to the scale of the organization.
• Alignment with the organization's strategy. The operation of the ERP system is carried out for a long period of time. Therefore, it should help the implementation of the company's strategic plans. The choice of the system must be carried out taking into account the prospects for development.
• Availability of industry solutions. The processes of an organization depend on the industry and the market in which it operates. When choosing a system, these factors must be taken into account.

The group of criteria "applied technologies" may include:

• Software architecture. Depending on the needs and capabilities of the organization, it is necessary to choose the appropriate software architecture of the ERP system, for example, " cloud services”, “client-server” architecture or “object-oriented” architecture.
• Technical architecture. This selection criterion is related to the previous one. The choice of technical architecture may require the organization to update communication channels, hardware, and computer equipment.
• ERP system implementation technology. This criterion depends on the service provider. As a rule, large manufacturers of ERP systems offer to use implementation technology for their software product. SAP, ORACLE, Microsoft, etc. have such technologies.

The group of criteria "functionality" may include:

• The composition of the modules. The choice of ERP system modules must be made depending on the current and future needs of the organization. The system should be able to expand in functionality.
• Integration. When choosing a system, it is necessary to take into account the possibility of integration with existing control systems in interrelated areas.
• visibility. An essential element of the functionality of the ERP system is the simplicity of the interface and the convenience of users. When choosing, it is necessary to take into account the possibility of customizing the interface to the needs of users.
• Regulatory Compliance. The ERP system affects many areas of the enterprise, which are regulated by law. Therefore, an important selection criterion will be the ability of the system to adjust to the requirements of local legislation.

The group of criteria "support" may include:

• support cycle. When choosing an ERP system, it is necessary to determine how long the supplier will support the system. Is there a possibility of switching to a new version of the ERP system, is there a possibility of refining the system to the needs of the organization.
• Availability of a support service. In the course of work, users of the ERP system will always have questions and difficulties. For effective work system, it is important that the supplier can guarantee support for the operation of the users of the system.
• Implementation experience. This criterion is related to the performance of the ERP system provider. It is necessary to pay attention to the number of successful implementations of ERP systems from a particular supplier.

The group of criteria "cost of ownership" may include:

• Software cost. For the operation of the ERP system of the organization, it is necessary to purchase licenses for its use. When choosing, you need to take into account the method of calculating the cost of these licenses (for example, per user group or per workplace etc.).
• Hardware cost. Depending on the architecture used, the cost of hardware can vary significantly. An organization may need to purchase server hardware, update the fleet of computing facilities.
• Service cost. This criterion is also significant in the cost of acquiring an ERP system.
• The cost of upgrading and updating. For some ERP system vendors, the cost of upgrades and upgrades may equal or exceed the cost of the original purchase.

Implementation of an ERP system

The implementation of an ERP system is usually a lengthy and complex process. Each major ERP system manufacturer has developed its own technologies and implementation methods. These techniques are somewhat different from each other, but the general procedure is basically the same. In addition, the order of implementation of the ERP system may vary depending on the software and hardware architecture of the ERP system. These techniques should be considered when choosing a service provider.

An organization that has decided to implement an ERP system must, for its part, take a number of actions for the successful implementation of the implementation project.

These actions include:

1. Preparation for implementation. At the stage of preparation of the organization, it is necessary to determine the main goals for which the ERP system will be implemented. This will allow you to clearly understand the results and expectations from the implementation of the ERP system. Since the implementation of an ERP system is a rather expensive project, it is necessary to estimate the estimated budget that the organization can allocate for implementation. Also, at this stage, the person responsible for the project is determined, and key specialists (members of the project team from the organization) are identified, the order of their interaction is determined.

2. Business analysis. These activities are among the most critical in the entire project. As a rule, an ERP system should work for a decade or more. Therefore, it is necessary to determine the development prospects of both the organization itself and the market for a long period.

At this stage, the organization should evaluate:

• prospects for the development of the market and the company for several years;
• composition and possibility of development of business processes of the organization;
• automation needs.

3. Choosing an ERP system. System selection should be based on current and future business needs. When evaluating the various options, it is necessary to be guided by the criteria indicated above (criteria for selecting ERP systems). To choose the system most suitable for the needs of the business, it is advisable to select at least 3 options for systems from different manufacturers.

4. Choice of supplier. As a rule, there are many suppliers of the same ERP system on the market. These are vendors or system integrators. They offer a range of services for the technical implementation of the ERP system. When choosing an ERP system supplier, you need to pay attention to its specialization. There are three types of supplier specialization.

Each supplier type has its own advantages and disadvantages:

• horizontal specialization. These companies have a large number of customers who work in different industries. As a rule, such providers have developed support services. However, their approach to implementation is “typical” for all customers.
• vertical specialization. These vendors specialize in working with customers from a limited number of industries (from one to three). This allows them to create solutions specifically tailored to the specifics of the industry. The approach to implementation of such companies is “tailored” for a specific industry.
• customer-oriented specialization. These vendors typically implement an ERP system to suit the needs of the customer. During implementation, they take as a basis the basic functionality of the ERP system and modify it to suit the customer's business conditions. This option has a significant drawback associated with updating the system and the stability of its work.

5. Project management. Responsible for the implementation of the ERP system and the organization's specialists must manage the project within the company. They must maintain a project plan, control the timing, budget, scope of work, compliance with the implementation goals. Another important project management task is to coordinate the interaction of the employees of the organization with the representatives of the supplier (the implementation team from the supplier).

6. Testing. Even with the best organization of implementation, there is a risk of errors in the system. Therefore, during the commissioning of the ERP system functionality, it is necessary to provide for mandatory testing of the operation of processes, departments and modules of the ERP system. the best way testing is the execution of parallel work in the old system and in the implemented ERP system. This will get rid of the main errors.

7. Training and education. Employee training is a prerequisite for the operation of an ERP system. Depending on the complexity of the system, it may take several weeks. Before starting training, you need to make sure that the ERP system has been tested. One bad option is when the service provider combines testing and user education. In this option, employees of the organization (future users of the system) act as system testers.

8. Commissioning. Commissioning is an important moment in the process of implementing an ERP system. There are two options for putting the system into operation: launching the system at once in the entire organization, and phased introduction. The second option is more preferable, because. allows you to gradually move to new working conditions. In the event of errors or problems in operation, only a part of the business (individual processes or departments) will be affected, and not the entire organization.

The main mistakes when implementing an ERP system

Implementing an ERP system is one of the most complex, time-consuming and expensive business improvement tasks. In the course of implementation, problems and errors always arise, to one degree or another affecting the timing, cost, and effectiveness of the project.

The main mistakes of the ERP system implementation project include:

• bad planning. For the successful implementation of the project, the implementation of the ERP system must be carefully planned. Poor planning often leads to loss of priorities, confusion with process automation, poor understanding of the current and future state of processes.
• insufficient assessment of ERP system vendors. Organizations are not working out the issue of selecting ERP system vendors. As a result, the choice is made in favor of the suppliers who offered the lowest price. Often, the supplier reduces the price in order to get at least one client and work out the implementation of a new system for him. As a result, after the completion of the project, it may turn out that the functionality of the ERP system is severely limited or the system works with errors.
• lack of understanding of needs. Starting the implementation of the ERP system, many organizations do not understand what functions and modules they need, what needs of the organization can be automated through the ERP system. This leads to the fact that a lot of unnecessary and unused functions and modules are being introduced, or vice versa, the necessary functions are applied to a limited extent.
• insufficient understanding of time and resource costs. Typically, organizations underestimate the time and resources required to implement an ERP system. This leads to high expectations from the system. Employees of the organization begin to believe that the ERP system will begin to work in full through a short time and it doesn't take much effort to get it to work.
• lack of qualified personnel in the implementation team. A common mistake of ERP system implementation projects is to involve simple performers in the project team. The project team on the part of the organization should include highly qualified specialists (key employees) in each area of ​​the organization's activities: finance, management, procurement, production, warehouse, etc.
• lack of priorities. Organizations do not prioritize achieving goals before starting a project. This leads to the fact that during the implementation of the ERP system, you have to solve many tasks, constantly switching between them. As a result, implementation time increases, additional errors and problems appear.
• employees are not trained. Insufficient or complete lack of employee training is a common reason for the unsuccessful implementation of an ERP system. Employees do not understand how to work in the system and this causes rejection. The system will be unclaimed, its functionality will be used to a limited extent.
• underestimation of data accuracy. At the heart of the ERP system is data processing. Therefore, the accuracy and efficiency of the system will depend on the reliability and accuracy of the data that is entered into the ERP system. To reduce errors, it is necessary to initially enter reliable and accurate data into the system. Employees working with the system must carefully check the data before entering it into the system.
• using outdated applications. Another problem leading to the low efficiency of the implementation of the ERP system is the continued use of legacy applications. The work is duplicated in the ERP system and old applications. Organizations continue to use them because paid for their support and renewal of licenses. This leads to the fact that the transition to work in the ERP system is delayed.
• there is no effective testing of the system. Often, ERP system vendors offer to test on a limited number of users. Such testing will not be able to reveal all the shortcomings and will not allow simulating a real user load.
• lack of maintenance and modernization strategy. If a company does not develop a strategy for maintaining and upgrading its ERP system, then it will quickly become obsolete. The technical (hardware) part of the ERP system requires modernization, because over time, the volume of data grows, and new computing power is required. The software part must be constantly upgraded in accordance with the changing requirements of the legislation and the market.

The above implementation problems are the most common and frequently encountered. In addition to these, there are always problems specific to each particular enterprise or organization. "An effective method to avoid or minimize losses from such errors is to carefully prepare and plan each stage of the ERP system implementation project.

The abbreviation ERP comes from the English expression Enterprise Resource Planning which literally means enterprise resource planning. Theoretically, such a system is a general strategy for the company, which takes into account the following areas:

• Management of financial resources - tax reporting, accounting, budget planning;
• Human resources management;
• Asset Management;
• Interaction with partners and accounting for the history of customer transactions.

On the practical side, speaking about business ERP systems, they mean software to automate each of the listed areas, as well as other processes of the company's activities to bring them into a common interconnected database necessary for the operation of the enterprise.

In simple terms, ERP systems are sets of activities that include: information flow management models in the enterprise, equipment for its storage and processing, software, IT department and technical support specialists, as well as directly users.

The structure of the enterprise resource planning IT system

Being a complex software, an ERP system consists of the following elements:

• Platform- the main environment (core) that ensures the operation of the program components, as well as the basic functionality (reference information, functions) of the company. This is the basis of the system, without which its work is impossible.
• Data management tools- this includes storage on the server, programs for processing information and transferring them for the operation of modules.
• Plugins- programs independent of each other that connect to the platform and use the main databases in their work. It is the presence of independent modules that can be disconnected and connected without disturbing the operation of the entire complex that distinguishes ERP systems from other types of software used in automating business processes.

Modules connected to the main platform of the production resource planning system are conventionally divided into three groups:

1. Internal- programs used within the enterprise, to which employees have access.
2. External- programs that customers and partners have access to (for example, a personal account of a dropshipper intermediary).
3. Connectors- programs for connecting with other software products that are not part of the ERP system, but used by the company in its activities. They perform data exchange.

Where to get an ERP system for an enterprise

There are three ways to purchase resource planning software:

1. Creating your own product. It often turns out to be an irrational method, since the lack of a professional approach can lead to a situation where only one direction will be taken into account, which will not give a tangible effect. At the same time, the system introduced in this way, as a rule, is difficult to replace or supplement.
2. Purchase of a ready-made platform and its implementation in the work of the enterprise. Here you need to do right choice according to the activities of your company. High-quality and well-known products are quite expensive and require constant support from the developer.
3. Professional development of ERP systems individually for the company. Only 20% of programs created on the domestic market are successfully integrated into the work of enterprises. This means that the company's risk of receiving a low-quality product at an inflated cost is quite large.

How to choose and implement an ERP system

There is no universal resource planning system suitable for all companies. For each production, its most optimal product is selected, which is then adjusted during the implementation process.

Types of ERP systems for enterprises

Classification of enterprise resource planning systems is carried out according to several parameters, the consideration of which will help you in choosing the right product. So, according to their purpose, they can be sectoral and general. The first option is suitable for large companies, as well as for enterprises that produce a unique product or apply non-standard business practices.

By type of organization, systems of the following formats are distinguished:

• public- access to the general functionality of the program has many users, but your data is available only to employees of your company.
• Private- the program is isolated and can be changed and finalized according to the tasks of the company.
• hybrid is a combination of two types.

By type of information storage:

• Cloud- databases are located on external servers.
• Internal- data is stored on the company's own server.

By user interface format:

• Stationary (desktop)- software for connecting to databases is installed on a PC and can work autonomously from the Internet, using only internal communications.
• Browser (working only online)- access to the system is carried out through the company's website and the personal account of an employee, client or partner.

By software architecture:

• Modular- consist of many components (modules) designed to solve various problems.
• Monolithic- uniform complex programs.

By license class for use:

• Proprietary- closed software, for the use of which you need to pay for a license.
• open source- free open source programs.

Errors in choosing a resource planning system

The wrong choice of ERP enterprise management system will not only entail additional costs, but may also adversely affect the operation of the enterprise. To avoid mistakes, you need to know the main ones:

• Lack of a well-chosen and clearly articulated goal. It is important to understand that ERP - should improve the work of the company, adopting the positive aspects and compensating for the negative ones. Therefore, when choosing, it is necessary to determine exactly what effect from the implementation should be obtained. If your goal is to optimize the business as a whole, you will not get the desired result. All tasks must be specified in the terms of reference (TOR). At the same time, the system should be adapted to the company, and not vice versa. It is a mistake to completely rebuild a business, especially if it is profitable, under an ERP system.
• Wrong choice of methodology for solving tasks. Each ERP system is built for a specific area of ​​business. It can be adapted for the manufacturing sector or exclusively for trade.
• One-sided view of system selection. The team of specialists who make up the TOR, who select and control the process of implementing the system, should include representatives of various departments of the company (IT, sales, personnel, production). Otherwise, the final product will be chosen from the standpoint of the convenience of only one link of users and will not bring proper efficiency to the enterprise as a whole.
• Insufficient qualifications of the developer and specialists implementing the implementation. The process of creating and integrating a resource planning system is expensive and many companies, in an effort to reduce costs, turn to firms with little experience or use free ERP systems, which is quite risky.
• Low level of control over the process of integrating the program into the system.
• Interface complexity. If the program is too complex to understand intuitively, you may face the problem of having to train your staff on how to use it. It also increases the risk of accidental errors when entering data, which entails incorrect planning and all the ensuing consequences.

What functions should a resource planning system provide

The main tool in business planning that allows you to make a decision is reporting documentation. It is she who is the basis of the work of ERP, which in turn should provide the ability to analyze report data from various positions. Therefore, an effective ERP system should have a number of the following functions:

• Providing convenient document flow. The main purpose of ERP systems is to provide quick documentation (invoices, invoices, reports, price lists), as well as subsequent operations with them (search, access, forwarding, editing).
• Planning. The algorithm of the system, especially for production, should allow planning payments, deliveries, warehouse operation, seasonal changes, production volumes. For each company, production planning is individual and is tied to a volume-calendar strategy.
• Information transparency. The program should record all transactions, parties, volumes and dates of their implementation, which will make the company's work more transparent for analysis.
• Access control for different levels. Since the system covers a very large amount of information about the work of the company, most of which must remain closed to lower-level employees, customers and partners, it must allow part of the data to be closed to users with different permissions.
• Unified data network. The ERP system should provide the ability to track all processes separately (for example, transactions) at all levels from the purchase of raw materials and production, to the registration of the sale and the payment of tax.
• Personnel accounting. The program should provide for the possibility of controlling the number of personnel, planning the schedule of exits and hours worked, taking into account the level of qualifications of employees and scheduling vacations, taking advanced training courses. Also efficient system planning provides for the possibility of calculating salaries and bonuses, taking into account the form of remuneration.
• Work with providers. The functionality of the system should allow you to store and process the database of suppliers, send requests for availability, plan the formation of orders, release working capital and pay bills, monitor the delivery process, and keep records of purchases.
• Work with clients. The system should allow for a complete record of data for each client, no matter how many legal entities included in the structure of the latter. This implies not only the possibility of allowing the client to work through his own account, but also the storage of data on completed transactions, receivables, supply planning, invoice processing, history of cooperation. This allows you to study the demand and the level of profit received from each client.
• Service and repair. If we are talking about production, this part of the program should ensure the planning of technical inspection of equipment, the schedule for scheduled repairs, modernization or replacement of enterprise equipment. For trade enterprises, the system should provide for the possibility of accounting for service maintenance of sold goods and repair under warranty.

Features of ERP implementation

The resource planning system operates with databases, which, as a rule, are very numerous. The information itself can be located on various media, including paper documentation, and therefore its transfer to an electronic format is a huge job. The data itself is divided into two groups:

• Important- information that is the basis of the enterprise. These are data on the work and management of production, reporting from the sales department and personnel officers. They must be used in the ERP system without fail.
• Are common- information that is relevant to a particular company, which is not used by the company constantly, but is also important. This data is added to the system as needed or at the request of the company's management.

An ideal ERP should include the ability to use all types of data, but in practice, in order to simplify the implementation process, the important ones are taken into account first, and then the common ones are gradually integrated.

Based on what data should be used and the required functionality of the system, a technical task is drawn up. It is an official document (instruction) demonstrating what tasks and goals need to be implemented in the implementation process. On the basis of the TOR, a calendar plan of work on integration is drawn up.

There are three strategies for implementing an enterprise resource planning system:

1. Step by step integration- first, the main modules are launched into operation (for example, accounting for finance, accounting and document management), and then, after debugging their work, the rest are gradually being introduced. This method is very time consuming and may not show results immediately. It is often used by companies in the independent development of the system.
2. Integrated implementation- the system is applied immediately in all directions and in full, and then a gradual debugging of work is carried out. This method allows you to quickly integrate an enterprise resource planning system. It is used when buying ready-made software.
3. Combined method- The introduction of ERP systems occurs immediately in all areas of activity, but in stages. This strategy allows you to minimize the time for implementation with the least loss of quality of work. Most often, this technique is used by private companies offering services for the development of individual software.

How an ERP system works and who needs it

Given the complexity and high cost, the introduction of ERP will be appropriate only for large companies, where the amount of data for accounting is very large and requires systematization. Such systems demonstrate high efficiency for large-scale production, in various corporations and holdings. If the company does not produce a wide range or is engaged in the manufacture of small batches, it does not need such a serious resource planning system, and it will only slow down the process and lead to unjustified losses.

The only exception, according to specialists of consulting agencies, is the use of ERP systems by small companies operating in a very competitive environment, where automation of all processes creates an additional advantage.

To understand whether you need such a system, you need to calculate the economic efficiency of its implementation. It can be determined by various parameters (decrease in stocks, speed of production, reduction in staff, increase in labor productivity), and as a result, for the enterprise itself, it should bring additional profit or, at least, cost reduction.

A Brief Overview of Popular ERPs

Most often, the main ERP systems of companies are finished products, adjusted to the activities of the enterprise. They can be paid and free. With proper implementation, you can achieve efficiency in both cases.

Popular Free Products:

• ERPNext- a minimalistic program for the work of a private entrepreneur (IP). The main disadvantage is the limited disk space, which can be increased for an additional fee.
• Galaxy ERP- designed for the domestic market and allows you to take into account frequent changes in legislation.

Paid programs:

• SAP ERP- one of the most popular systems offering wide functionality and user-friendly interface.
• 1C:Enterprise- a fairly popular and affordable system that offers a large number of specialized solutions.
• OpenBravo ERP- a program for the middle level with convenient scaling and affordable cost.

Advantages and disadvantages of ERP

Most of the shortcomings of ERP systems stem from its basic qualities, since the main problems that companies face when implementing a program are related to making mistakes when deciding on the need to use and directly choosing software.

Negative aspects of integrating a resource planning system

Despite the fact that the purpose of ERP systems is to improve the process of production activities, they have their drawbacks. Among the latter:

• Program complexity and, as a consequence, the high cost of purchase and implementation.
• Increased requirements for data storage and processing equipment, including servers for storing backups. It must be reliable and fast, which determines the high cost.
• The need for additional data protection, careful control of the security system and setting up an access hierarchy. Storing information in an electronic format, and especially when accessed via a network, increases the risk of the theft or destruction (intentional or accidental) of important documents.
• Dependence on the energy supply of the company. If there is a problem with the electrical network in the offices, warehouses or trading floors of the company, the work of the company can completely stop.

Practical advantages of an ERP system

The implementation of strategy and software for accounting and resource planning is effective method to achieve improvements in the work of the company, which has the following advantages:

• The ability to integrate into various types of production and quickly adapt to a wide range of enterprise activities. The ERP system is suitable for industrial complexes, banking organizations, trade enterprises, service industries.
• Support for planning methods in various areas of the company's activities.
• Ability to build a virtual enterprise.
• High-quality financial accounting for all departments.
• The ability to manage corporations with a large number of international divisions and remote employees.
• Scalability and flexibility for implementation in enterprises of various sizes.
• Ability to work with other programs and applications used in the enterprise.
• Integration of data into a single system, which makes it available to multiple departments.

Understanding the features of the ERP system, what it is in simple words and how to choose it for your company, you will be able to prevent yourself from mistakenly buying an expensive product that you do not need, choosing the most effective one, you will be able to competently implement it, increase the efficiency and profit of the company.

ERP-system (Enterprise Resource Planning) is a company resource management system. Read how to choose it, what are its advantages and disadvantages, how much it costs and what to consider in order for the implementation to be successful.

What is an ERP system and why is it needed

ERP system stands for Enterprise Resource Planning. An ERP system, in simple terms, is a company's resource management system. Usually they are implemented at large enterprises with complex production, an extensive branch network, a large assortment of products, and an increased volume of warehouse operations. Their main advantage is that they allow you to combine several tasks: you can simultaneously take into account and plan cash, as well as track their movement; and assess the productivity of the enterprise. In addition, all processes become transparent.

ERP provides:

1. Consolidation of all business processes according to uniform rules within one system;
2. Prompt receipt by the management of information on all aspects of the enterprise's activities;
3. Planning and control of the organization's activities (short-term and long-term plans of various departments are linked to each other).

As a result, the efficiency of business management and its competitiveness increase.

The YRP system is also convenient because it can be implemented in parts (modules), automating, for example, first production and then work with personnel. A set of modules covers all areas of activity, which allows you to automate almost all business processes.

The experience of enterprises that have been successfully implemented shows that as a result, inventory is reduced (by an average of 21.5%), labor productivity increases (by 17.5%), and the number of timely completed orders increases (by 14.5%). In addition, the investment attractiveness of a business is increasing, especially for foreign investors who always want it to be transparent.

Pros and cons of an ERP system

Resource management systems have two major drawbacks: they tend to be expensive and time consuming to implement.

Expenses should be considered by the management of the company as a strategic investment that will bring additional profit far from immediately. Usually payback comes only after a few years.

The high cost consists of several components:

• the price of one license, that is, in fact, the price of one workplace, ranges from 1,500 to 8,000 dollars;
• price per consulting services, implementation and maintenance ranges from 100-500% of the cost;
• the price of user training is from $1,000 per week.

The long and difficult implementation of ERP is due, as a rule, to the need for a serious review of the company's work. It cannot be implemented in an enterprise where business processes are not debugged (see also about). That is why a preliminary independent study of the enterprise by a consulting company is required. This will make it possible to understand whether it is possible to implement any system at this enterprise at all, or whether it is necessary to first correct business processes. If this stage is skipped, the enterprise risks losing huge amounts of money in the event of an unsuccessful or protracted installation of the system.

If, as a result of the study, it is revealed that the organization is ready for installation (that is, all business processes are sufficiently debugged), you can begin to draw up a work plan. At the same time, management must determine which functional areas and which types of production need to be covered, which reports to prepare.

It is advisable to draw up a document "Requirements for an ERP system" for use primarily within the enterprise. It should formalize and describe all its essential characteristics. Only then should the choice be made.

According to statistics, only 30% of all implementations are successful, that is, the costs pay off. However, your company has a chance to improve such disappointing statistics. To do this, you need to take into account someone else's experience. Let's talk about everything in order.

Implementation methods

There are several methods for implementing the ERP system.

1. Phased Implementation – Only a few related business processes are automated. With this option, the risk of failure is relatively low.
2. "Big Bang" - installation entirely and immediately. This is a very risky option, which is preferred for relatively uncomplicated production. This method requires an intensive testing phase, since it is necessary to carefully check how error-free all business processes are automated.
3. Deployment - the introduction into operation in one area of ​​​​production (in a department, branch, etc.), and then it is already distributed to other areas. The deployment itself at each site can be done as a phased implementation or as a "big bang". The risk in this case is usually negligible (unless you overdo it with "big bangs").

It is necessary to carefully analyze which of these ERP implementation methods is the most optimal for your company (taking into account the costs and experience of other firms), and only then proceed with the choice.

Choosing an ERP system

Today in the Russian market there are several automated enterprise management systems of both Western and domestic manufacturers. Which ERP is better - Western or domestic? Opinions on this issue are very contradictory. Let's highlight the strengths and weaknesses of both options.

Undoubtedly, the strength of Western platforms is a clearly defined sequence of actions in production planning. The main drawback is the need for refinement, taking into account national characteristics. For example, for accounting and reporting in accordance with Russian rules, you have to refine the settings of the "Finance" module.

In addition, Russian enterprises where products are manufactured according to design and technological documentation (for example, machine-building and instrument-making plants) are required to use the ESKD (Unified System for Design Documentation) and ESTD (Unified System for Technological Documentation) standards. Western automated control systems do not support these standards. Therefore, improvements are needed at the software level. This requires additional costs, which should be taken into account in advance.

Russian systems and their implementation are much cheaper than Western ones. And, of course, domestic experts take into account Russian specifics.

When choosing an integrator - a company that carries out the installation, two factors must be taken into account: its competence and experience in automating enterprises in similar industries or specific business processes. You should also pay attention to what professional services the integrator provides (consulting, business process optimization, project management, performance evaluation, staff training).

Installation costs

When forming a preliminary project budget, it is necessary to take into account that the costs include not only the cost of the program itself (shell, user licenses, etc.) and the services of a system integrator. The estimate will also include the cost of customization taking into account existing business processes, the cost of user training services (and for large companies also a training center and support service), the cost of purchasing or renting additional equipment, as well as possible costs of attracting third-party consultants. And, finally, it is worth considering the costs of the motivational part (including deductions) of the project participants.

The project budget should include a possible overestimate. Both clients and representatives of consulting companies, as a rule, consider it quite normal if the actual costs exceed the planned ones by 10-15 percent, but in practice these discrepancies are greater.

When installing ERP, companies face necessary, but sometimes unexpected costs for them. For many, this is the cost of staff training, which is often comparable to the cost of the system. However, workers almost always have to learn a new set of processes rather than just a different program interface, which adds to the cost.

Another surprise can lie in wait for the enterprise when checking the links between modules and other programs. Organizations usually already have software complexes procurement, production planning, barcoding, etc. If additional ERP system customization is required to ensure compatibility with these programs, a sharp increase in the cost of integration, testing and maintenance of software is inevitable.

Consultant fees are also a significant expense, but to avoid unexpectedly high fees, the consultant's responsibilities must be clearly stated in the contract.

Reasons for unsuccessful implementation of ERP systems

Many businesses rely solely on own service informatization or invite third-party specialists for temporary work, trying to save on the services of consultants. Alas, this often leads to the fact that the work is delayed for several years, and the company loses time and resources. The fact is that the introduction of resource management systems involves the reorganization of all business processes, and such a task is often beyond the capacity of internal and external specialists.

However, if the company's management decides to completely entrust the installation of ERP to a system integrator, another mistake is possible. All functions are shifted to consultants. The specialists themselves take a detached position - they say, they will do it, and we will see. But even the most qualified consultants cannot see and know the whole state of affairs in the company, and besides, it is the personnel of the enterprise who will eventually have to work with the system. The success of the project depends equally on the consultants and on the company itself. Therefore, it is better when both parties are responsible for the results.

Problems can arise if a large organization installs the entire system (the "big bang" method). Experience shows that failure in this case is almost guaranteed. A sharp change in the principles of work is a stress for the entire enterprise, so the process should never be artificially accelerated. The staff must gradually get used to the changes that ERP brings. Therefore, it is more correct to first choose the methods of phased implementation or deployment.

It is necessary to be prepared for the resistance of employees. This is one of the main problems that management faces. It is due to the fact that for a long time, employees have significantly increased worries. In addition, their mistakes, thanks to innovations, become noticeable to all participants in business processes and, above all, to management (see. ).

And the last thing - after installation, do not expect a quick and "wonderful" transformation of the company. As we have already noted, the effect of the introduction of ERP is a matter of time. The main positive result at the first stage of the system is that it will force you to debug and improve all business processes. And this is already a lot.

User support and motivation

It is worth dwelling separately on two important aspects of automation: user training and support, as well as motivation. It is logical to first of all train the implementation team to work with the new IT system, and then organize a user training center (if the company is large) or hold a series of face-to-face meetings if there are not so many employees. You can also teach remotely, using webinars, recorded courses, and other opportunities.

After the implementation has taken place, it is necessary to provide users with a constantly updated library of instructions, for example, on a corporate portal.

You also need to remember about motivation. The implementation of any ERP system requires enormous labor costs from participants, so unmotivated staff, including those in ordinary positions, will significantly increase staff turnover.

Annotation: ERP systems and business opportunity management. The composition of the ERP system. The main differences between MRP and ERP systems. Features of the choice and implementation of the ERP-system. The main problems of implementation and use of ERP-systems.

9. Information systems for resource planning and enterprise management: ERP systems

9.1. ERP and Business Opportunity Management

In the early 90s. analytical company Gartner Group has introduced a new concept. Class MRP II systems in integration with the financial planning module (Finance Requirements Planning - FRP) are called enterprise resource planning systems (Enterprise Resource Planning - ERP). The term "Enterprise-Wide Resource Planning" is also sometimes encountered.

ERP systems are based on the principle of creating a single data warehouse (repository) containing all corporate business information: planning, financial, production, personnel data, etc. Having a single corporate repository eliminates the need to transfer data from one system to another (for example, , from the production system to the financial or personnel). Such a system also provides simultaneous access to information of any number of employees of the enterprise with the appropriate authority. The purpose of ERP systems is not only to improve the management of the enterprise's production activities, but also to reduce the costs and efforts to support its internal information flows.

There are many definitions of ERP systems. One of the most common ones is the following:

ERP-system is a set of integrated applications that allow you to create an integrated information environment (IIS) to automate the planning, accounting, control and analysis of all major business operations of the enterprise. ERP-systems are the basis of IIS of an enterprise.

As originally defined by the American Industrial and Inventory Management Society (APICS): "ERP is a method for effectively planning and controlling all the resources needed to receive, make, ship, and account for customer orders in a manufacturing, distribution, or service company."

In the latest edition of APICS: "ERP is an approach for organizing, defining and standardizing the business processes required by an organization so that the organization can use internal knowledge to seek external advantage."

As a rule, ERP-systems are built on a modular basis, and to one degree or another cover all the key processes of the company (Fig. 9.1). The software tools used in ERP systems allow for production planning, modeling the flow of orders and evaluating the possibility of their implementation in the services and divisions of the enterprise, linking it with sales.

In 1990, the following IP formula based on Enterprise Resource Planning was proposed: where not only materials and time of work centers are subject to planning, but also financial resources FRP, DRP - distribution resource management.

Rice. 9.1.

Main functions of ERP systems:

• maintenance of design and technological specifications that determine the composition of manufactured products, as well as material resources and operations necessary for its manufacture;
• formation of sales and production plans;
• planning the needs for materials and components, terms and volumes of deliveries to fulfill the production plan;
• inventory and procurement management: maintaining contracts, implementing centralized purchases, ensuring accounting and optimization of warehouse and workshop stocks;
• planning of production capacities from enlarged planning to the use of individual machines and equipment;
• operational financial management, including drafting financial plan and monitoring its implementation, financial and management accounting;
• project management, including planning the stages and resources required for their implementation.

Later, ERP systems began to include an additional module APS (Advanced Planning and Scheduling) - a planning technique that uses mathematical optimization methods in scheduling, since ordinary algorithms become inoperable to solve even seemingly simple discrete planning problems for a distributed distribution network due to the large size of the processed data.

In the late 90s. In the 20th century, the methodology "Customer Synchronized Resource Planning (CSRP)" was also developed, which covers the interaction of the enterprise with customers: issuing a work order, terms of reference, customer support, resource planning depending on the volume and composition of customer orders. If the MRP/MRPII/ERP standards are focused on inventory and capacity management, planning, production and sale of the product, then the CSRP standard includes the full cycle of the product life cycle - from its design taking into account customer requirements to warranty and after-sales service.

This new type of CIS in some sources began to be called the ERP II system, the basis of which is the management of the company's interaction with the external environment. Where possible, internal and confidential processes become external and open. Excessive secrecy of corporate information, which complicated the activity, disappears. It is being replaced by a clearly regulated policy in the field of information security and the security of information systems themselves.

The combination of an ERP system with OLAP technologies, a balanced scorecard (Balanced Score Card) and a functional cost management system led to the emergence and development of BPM (Business Performance Management) systems - business performance management, which allow you to link the operational results of an enterprise with the effectiveness of the mission company [Yu. Amiridi, Intersoft Lab, http://www.iso.ru/cgi-bin/main]. What tasks do BPM systems solve and what place do they occupy among other business process automation software products?

To answer this question, we will use the materials of the report "Successful experience in business performance management: business and technical strategies" ("Best Practices in Business Performance Management: Business and Technical Strategies") of the International Data Warehousing Institute (DWI) 2004. This report positions BPM systems by analyzing general scheme development of software for automating business processes over the past twenty years (Fig. 9.2).

Rice. 9.2.

First, systems for automating internal (back-office) processes appeared, primarily production (inventory management and automation of production line management) and accounting. Then came the turn of the processes of interconnection with the external environment (front office processes): supplies, sales, services, marketing. At the end of the twentieth century, organizations moved to automate cross-functional processes that affect the work of several departments, implementing technologies for customer relationship management (Customer Relationship Management - CRM), and supply chain management technologies (Supply Chain Management - SCM). And, finally, the top of the pyramid, which has been automated quite recently, is corporate governance. To solve this problem, a special class of software is distinguished in the world - BPM-systems.

Moving up the levels of the pyramid reflects a gradual transition from automating operational business processes to automating business management strategies. Processes at higher levels of the pyramid control processes at lower levels. Thus, BPM systems are designed to automate the strategic planning of business development and, at the same time, to support tactical (or operational) business process management at different levels. The task of BPM-systems is to help in the implementation of strategic business goals in real conditions. To do this, they must provide the user with the right information at the right time in order to improve the efficiency of operational management.

The functional architecture of a classic BPM system consists of three components. The first part is the data warehouse. This is the basis of a BPM system. It consolidates operational information from various automated modules of the head office and branches of the organization, from subsidiaries and partner companies. The second component is a set of tools to support enterprise management technologies: financial planning, management accounting, forecasting, management of production and auxiliary processes, etc. The third component of BPM is OLAP analytical tools for operational work with business data that is accumulated in the warehouse.

Thus, BPM systems cannot be called something fundamentally new. They combine well-known management technologies and software solutions that were previously used locally and solved the problems of individual departments and users. What then are the advantages and novelty of the BPM approach? But the fact is that the BPM-system is designed to support the full cycle of company management.

This means that BPM tools are interconnected and ensure the execution of four main stages of business performance management:

Strategy Development. The purpose of the first stage is to identify business target indicators (key performance indicators) and plan the quantitative values ​​of their metrics (Key Performance Indicators - KPI). Strategic planning relies on one of the BPM methodologies known as the Balanced Scorecard (BSC).

Tactical planning. At the second stage, tactical plans are developed to achieve the set strategic goals. KPIs become benchmarks for developing tactical (operational) plans. The main tool for operational planning is the budgeting of various aspects of the enterprise.

Monitoring and control of execution. The third stage in the corporate governance cycle is monitoring and control over the execution of budgetary and production plans. Actual values ​​for management and financial accounting items are calculated based on the primary data collected in the warehouse. To compare the planned and achieved budget indicators and KPIs, tools of "plan-fact" analysis are used based on the technology of multidimensional data analysis OLAP.

Analysis and regulation. At the final stage, strategic plans are adjusted in accordance with the actual operating conditions of the enterprise. To plan changes, tools for forecasting and modeling various scenarios for the development of the situation are used. As a result, the cycle of corporate governance - between the chosen strategy and its practical implementation - closes.

ERP systems are focused on automating management processes, maintaining business processes and reducing operating costs, but are not able to provide comprehensive, easy and quick access to the necessary management information. In addition, it turned out that not all the information needed by both top management and managers and specialists in the field is available in the ERP system. This situation is exacerbated by the fact that companies often use not one, but several ERP systems inherited as a result of mergers and acquisitions.

In contrast, BPM systems provide a holistic, process-oriented approach to management decision-making aimed at improving the company's ability to realistically assess its current state and manage the effectiveness of its activities at all levels, by bringing together process owners, managers, staff and external counterparties within the framework of common integrated management environment.

Note that in this sense the concept of "BPM-system" can be used in two meanings: as a management concept (i.e., a certain approach to making managerial decisions and their practical implementation) and as an information system (a set of software tools that support the BPM ideology and providing it practical implementation). This does not mean, however, that the BPM system "cancels" or "replaces" ERP. Figure 9.3 shows a possible interaction between ERP and BPM systems.

From the above diagram it can be seen that an important role in the transformation of data from ERP into a BPM system is the so-called Data Maps modules - tools for unifying data received from various sources and bringing them into line with common reference books (data conversion process). These tools are also used for feedback, for example, to transfer the results of strategic or operational planning to the ERP system, for the subsequent formation of more detailed plans.

We also note that not only ERP subsystems, but also transactional systems of other systems act as sources of financial and non-financial data for the BPM system:

• customer relationship management (Customer Relationships Management - CRM);
• supply chain management (Supply Chain Management - SCM);
• asset management (Assets Management - AM);
• personnel management (Human Resources Management - HRM);
• other sources - databases, spreadsheets, etc.

Thus, with the solution an integral infrastructure is being created to support consistent strategic and tactical enterprise management based on a single data model. This is the fundamental difference between an integrated approach based on corporate management automation systems and an isolated solution of individual management tasks.

9.2. The composition of the ERP system

ERP-systems are designed to manage all the financial and economic activities of the enterprise. They are used to promptly provide the management of the enterprise with the information necessary for making managerial decisions, as well as to create an infrastructure for electronic data exchange between the enterprise and suppliers and consumers. ERP-system allows you to use one integrated program instead of several disparate ones. A single system can manage processing, logistics, distribution, inventory, shipping, invoicing and accounting.

The information access control system implemented in ERP systems is designed (in combination with other enterprise information security measures) to counteract both external threats (for example, industrial espionage) and internal ones (for example, data theft). Implemented in conjunction with quality control and customer relationship support systems, ERP systems are aimed at maximizing the satisfaction of companies' needs for business management tools.

The main functional blocks of a typed ERP system are shown below.

Demand management. The block is designed to forecast future demand for products, determine the volume of orders that can be offered to the client at a particular point in time, determine the demand of distributors, demand within the enterprise, etc.

Sales and production planning. The result of the action of the block is the development of a plan for the production of the main types of products.

Advanced capacity planning. Used to specify production plans and determine the degree of their feasibility.

The main production plan (production schedule). Products are determined in final units (products) with the terms of manufacture and quantity.

Material requirements planning. The types of material resources (prefabricated assemblies, finished units, purchased products, raw materials, semi-finished products, etc.) and the specific timing of their delivery to fulfill the plan are determined.

Product specification. Determines the composition of the final product, the material resources necessary for its manufacture, etc. In fact, the specification is the link between the main production plan and the material requirements plan.

Planning for capacity requirements. At this stage of planning, production capacities are determined in more detail than at previous levels.

Routing/work centers. With the help of this block, both the production capacities of various levels and the routes in accordance with which products are produced are specified.

Checking and adjusting workshop plans for capacities.

Purchasing, inventory, sales management.

Financial management (maintenance of the General Ledger, settlements with debtors and creditors, fixed assets accounting, cash management, financial activity planning, etc.).

Cost management (accounting for all costs of the enterprise and costing of finished products or services).

Project/program management.

Personnel Management.

In addition, for ERP systems, it is almost mandatory to have the possibility of electronic data exchange with other applications, as well as modeling a number of situations related primarily to planning and forecasting.

In accordance with modern requirements, an ERP system should, in addition to the core that implements the MRPII standard (or its equivalent for continuous production), include the following modules:

• supply chain management (Distribution Resource Planning - DRP);
• advanced planning and production scheduling (Advanced Planning and Scheduling - APS);
• customer relationship management (Customer Relation Management - CRM, formerly called sales automation module - Sales Force Automation);
• e-commerce (Electronic Commerce - EU);
• product data management (Product Data Management - PDM);
• Business Intelligence add-ons, including solutions based on OLAP (On-Line Analytical Processing) and DSS (Decision Support Systems) technologies;
• standalone module responsible for system configuration (Standalone Configuration Engine - SCE);
• final (detailed) resource planning FRP (Finite Resource Planning).

Rice. 9.6.

If there are practically no problems with the acquisition of a small, as a rule, "box" system, then with medium-sized and, moreover, with large systems, everything is much more complicated.

Table 9.1. Ratio of implementation cost estimates

	Local systems	Small Integrated Systems	Medium integrated systems	Large integrated systems
Implementation	Simple, boxed version	Step by step or boxed version. More than 4 months	Only step by step. More than 6-9 months	Step by step, complex. More than 9-12 months.
Functional completeness	Accounting systems (by directions)	Comprehensive accounting and financial management	Integrated management: accounting, management, production
Cost ratio license/implementation/equipment	1/0,5/2	1/1/1	1/2/1	1/1-5/1
Estimated cost	5-50 thousand dollars.	50-300 thousand dollars.	200-500 thousand dollars.	500 thousand - more than 1 million dollars.

A large information ERP system cannot be bought, delivered, turned on and used so easily. The enterprise must be thoroughly prepared for the implementation of such a system. The introduction of an ERP system is akin to a complex surgical operation - both here and there you have to cut it "on the fly", and here and there a lot depends on careful preparation, on the skills of professionals, and something - on luck!

The choice of a specific ERP system for implementation is a complex and multi-criteria process for the following main reasons:

• the high cost of the purchased product (up to several million dollars);
• a wide variety of proposed ERP-systems;
• the duration of the training period for specialists in the product being introduced;
• pre-sale cycle (from several months to several years);
• the implementation cycle itself (the implementation cycle of an ERP system, even at one production site of an enterprise, can last up to several years).

When choosing an ERP system, you need to understand that automation for the sake of automation does not make sense. It should be clear that the world's best ERP-system will not be able to solve all the problems of the enterprise.

Any ERP system is, first of all, a tool for improving the efficiency and quality of enterprise management, making the right strategic and tactical decisions based on automated processing of relevant and reliable information. At the same time, an ERP system is not only a toolkit for business, but also a technology for doing it.

The management of the enterprise should be primarily interested in choosing the right ERP system. The project to implement an ERP system should be considered by the company's management as a strategic investment.

Naturally, any enterprise would prefer to implement a proven, reliable and affordable ERP system for it. The question is which system makes sense to introduce - Western or domestic? And here it is impossible to give an unambiguous answer.

Currently, Russian systems demonstrate good development dynamics, however, Western systems are still richer in functionality. A feature of Western systems is also that they have been developed (and refined) for several decades in accordance with the global principles of efficient business conduct (without tax evasion, double-entry bookkeeping, etc.). That is, the so-called "correct" ("civilized") business model is much better implemented in Western systems. This advantage is at the same time their disadvantage (in relation to Russian conditions), since Western ERP systems are less adapted to work with complex, non-integral and illogical business models that are currently more viable in Russia. The disadvantage of Western systems is also their high cost, although some Russian software systems are already catching up with Western ERP systems in terms of cost.

If an enterprise decides to implement Russian enterprise management software, then in this case it cannot be said how "good" or "bad" the system is - in each case, a specific software product and specific conditions for acquisition and implementation should be considered.

The main thing when choosing an ERP system is to determine what new benefits the enterprise will gain from its implementation. It is necessary to understand in detail what an ERP system can provide for a business, what goals it will allow to realize and what impact it can have on the profitability of an enterprise and the cost of its products. At the same time, it must always be taken into account that the cost of delivery, implementation and maintenance of an ERP system cannot be more expensive than the cost of the entire business of the enterprise!

First of all, the management of the enterprise must understand why the enterprise needs an ERP system. Even before implementation, any system must have clear and measurable goals set in the so-called "SMART-system": goals must be specific (Specific), measurable (Measurable), agreed (Adjusted), relevant (Relevant) and have certain time of execution (Time of Execution). It is desirable that the answer to this question could be formalized and presented visually in figures and diagrams (the amount of savings, higher turnover of goods, reduced time to work with suppliers and customers, etc.). The main requirements for the ERP system must be formulated and approved by the management of the enterprise:

• what goals of economic activity and tasks of the business as a whole will allow the acquired and implemented system to be implemented;
• what functional areas and types of production it should cover;
• what processes should be automated;
• what reports to prepare;
• what software and hardware platforms to use.

It is very important to clearly define the current and future needs of the enterprise or organization. It is necessary to understand well what drives a business, what factors are critical for success and what is necessary for the development of the company. The requirements must be formalized in the form of a special document (Vision Scope), which defines and prioritizes all the desired characteristics of the ERP system.

It is equally important to correctly assess the existing technological infrastructure of the enterprise. If, in order to implement an ERP system, an enterprise will first have to spend significant funds (comparable to the cost of the system being implemented) to upgrade their local or global networks, then this option may not be profitable. In general, the implemented ERP-system should correspond to the existing financial and technological level of the enterprise.

It should also be understood that the greatest effect is achieved with the integrated implementation of the ERP system. It is pointless to spend huge amounts of money on a system that will not be fully utilized, or a system that will need to be constantly upgraded.

An extremely important point is the correct choice of the developer (or developer-implementer, as is often the case in Russia) of the ERP system, which should not only deliver its software to the client company, but become its long-term partner, providing support and further development of the system.

The client enterprise must be confident in the high quality and timeliness of future upgrades of the installed ERP system (when new versions appear), in solving all the problems related to its flexibility and scalability. If the implementation of an ERP system consulting company, then it is equally important to understand the relationship between it and the developer of the ERP system. In any case, it is very useful to arrange a tender between ERP system vendors. The organization of the tender will significantly reduce the initial price of delivery and better understand the possibilities - both of the proposed systems and their developers.

It is not just a set of programs with documentation that is bought (most of which are created on the basis of standard tools and are based on common platforms) - the work and experience of the formed team of the ERP system developer company, which bears various types of responsibility (from legal to moral) for the quality and efficiency of the installed and maintained software and technological systems.

The implementation of an ERP system should be carried out by the implementing firm (or, in some cases, the development company) in close contact with the IT department and the relevant interested departments of the enterprise. After the implementation of the ERP system, certain types of work on upgrading the system can be entrusted to external consultants from the developer (consulting firm), and its overall support can be left to the IT department.

In some cases, enterprises rely on systems developed by their own IT departments. Practice shows that focusing on "self-written" systems allows you to get the IS most suitable for the company's business, but ultimately makes the company dependent on its own developers.

It is rare that such a self-developed software product remains viable for long enough. There is usually no corresponding complete and up-to-date documentation on it. It cannot be said that it has been professionally tested at the stages of development and commissioning and is reliably accompanied (an example of this is, for example, the Krupskaya confectionery factory in St. Petersburg, which had to hastily switch from legacy systems to the Parus software product due to departure of its lead programmers). A large enterprise can afford to invest in the development of its own (for its specific needs) CIS only if the following basic conditions are met:

• there is no ready-made software product on the market that satisfies the enterprise in terms of functionality, cost and maintenance conditions;
• the enterprise has a powerful IT department with experienced analysts, project managers and programmers;
• there is a complete and competent statement of the problem;
• there is a technical possibility to simulate the work of the created software during trial operation;
• there is the possibility of real maintenance of the created system on its own;
• the possibility of replicating the developed software for subsidiaries (industry) enterprises.

Basic principles for choosing an ERP system

When choosing an ERP system, you need to pay special attention to the following main points.

The image of the developer company, the time of its work on the market, the reputation of the system itself and the total number of successful implementations. However, the solidity of the company is not the main factor of choice. Many newcomers to the market (those who do not have annual turnover of millions and thousands of customers) offer interesting solutions based on modern technology and at a very reasonable price. A large number of implementations may also be the merit of marketing, and not the actual quality of the system. There are at least a few cases when enterprises changed their ERP systems several times, which have well-known brands on the Russian market (both Western and Russian). The main reason for the replacement of these systems was the lack of functionality of the systems, low speed, low scalability, poor quality of support when systems needed to be improved, etc.

Number of successful implementations in Russia. First of all, we mean complex implementations. It is also important to know if there are implementations in related industry enterprises, and if the help of external consultants was required. It is also necessary to see how the system really works at least at one or two sites and talk with IT managers and its ordinary users (no marketing materials or even articles in specialized publications will help to get a more or less complete picture of the real capabilities of the system - in some cases, they are even harmful, since advertising publications can form an inadequate idea of ​​​​the ERP system from an unprepared manager!).

However, you should always remember that any (even extremely functionally rich) ERP system is customized to the needs of a particular enterprise (and there are simply no twin enterprises even within the same industry). In this case, it is important to understand whether the company-developer is able to "finish" the supplied system for the functionality required by the customer enterprise within a reasonable time. It should be remembered that in some cases the cost of finalizing the system and its subsequent maintenance may exceed the base cost.

Flexibility and openness. This is one of critical factors choosing an ERP system. In accordance with world experience, the period of a fully functional implementation of an ERP system usually lasts at least 3 years, and it should fully work for at least 10 years. During this time, the enterprise has changed significantly (its products, organizational structure, management system, business processes, roles and powers of officials, etc.).

The information and analytical system, which is the basis of enterprise management, must change along with production. It should allow you to easily change automated workstations (AWS) and menus, generate reports and certificates, make arbitrary selections of information in a convenient presentation, change business process support technology and reporting form templates by parametric settings. The system should be easily configured and integrated within the IIS of an enterprise with other software (for example, with corporate payroll or personnel management software, document management software, CAD/CAM/CAE systems, PDM systems, etc.). An important point in this case is that all the necessary improvements to the system should be made by the developer company, which is legally responsible to the enterprise for the quality of its work.

Terminology. When analyzing the Western system, it is necessary to carefully analyze its terminology and the quality of Russification. Documentation should be complete and understandable, and terminology should be familiar. In turn, the accompanying documentation for the Russian system should also be complete and understandable.

Western system localization quality. The Russian economy has its own specifics (legal, accounting, tax, etc.). In the design and technological preparation of production in Russia, the standards of ESKD, ESTD and ESPD (Unified System for Design, Technological and Program Documentation) are universally adopted. In Western enterprises, a subject-closed organization of production has been adopted, while in Russia technological specialization is more common. In the West, it is not a shop management structure, but in Russia it is a shop structure. The system should also take into account such Russian realities as credit chains, prepayment, payment in non-monetary form, the possibility of off-balance ("gray") cash, etc.

Russian company engaged in the localization and implementation of a Western system (or the development and implementation of a Russian system). The work experience and qualifications of its employees, their real knowledge of production, approaches to implementation, the number of successful implemented projects, real support for changes in Russian legislation in the implemented and maintained system.

Geographical proximity of the company-developer or company-implementer. It is easier and more convenient to interact with a company whose employees can quickly (within a few hours) appear at the enterprise where the system they have implemented is working. Geographical proximity is also important if it is necessary to refine the system, since the developer usually always includes travel expenses in the cost of revision (we should not forget about the increase in the duration and inconvenience of the refinement project if the developer is far enough away).

Acceptability of the price of the system. It should be borne in mind that the entire installation cycle of an ERP system (purchase, implementation, maintenance, development) will have to be spent several times more than for the purchase of the software itself (with a coefficient of 3.0-10.0). At the same time, the more complex and expensive the implemented ERP system, the higher the coefficient will be.

Possibility of modular acquisition of the system. To save money, it should be possible to purchase and implement an ERP system module by module and only for the required number of jobs. Buying a complete set of system modules right away is not the best option, since all modules will be implemented only after a few years, and during this time some of them may already become obsolete (like the system itself).

Table 9.2. An example of constructing a matrix "Criteria for choosing IP"

Criteria	criticality	By level of detail	According to the complexity of the assessment	By importance to potential users	Final weight
openness	0,8	0,1	0,2	0,8	1,9
Functionality	0,6	0,3	0,4	1	2,3
Tool set	0,6	0,2	0,4	0,4	1,6
Documentation	0,6	0,3	0,4	1	2,3
Reliability	0,9	0,4	0,3	0,8	2,4
Ease of use	0,3	0,2	0,4	0,8	1,6
Client base	0,8	0,5	0,5	0,3	2,1
Successful implementations	0,9	0,5	0,2	0,3	1,9
Technical support	0,7	0,3	0,3	0,9	2,1
Price	0,4	0,5	0,5	0,2	1,6

When deciding on the choice of a particular system, it is advisable to independently or with the help of a consulting firm build a matrix of criteria for choosing an IS. An example of constructing a matrix "IP selection criteria" is given in table 9.2.

Basic technical requirements for an ERP system

The selected ERP system must meet the following general technical requirements (at least most of them):

1. Ability to integrate with a large number of software products (with a minimum level of integration - at the level of open code command line or support for the OLE Automation standard).
2. Ensuring security with the help of various methods of control and differentiation of access to information resources. The presence in the ERP system of software and hardware information protection certified by the FAPSI (allowing to encrypt data, supporting an electronic digital signature and authenticating users based on it). The effectiveness of software protection tools can also be significantly increased through the use of hardware and biometric tools (hardware keys, tokens, smart cards, fingerprint recognition devices, retina, voice, face, digitized signature, etc.) Russian market.
3. Scalability to work with a different number of client places and the possibility of developing the system.
4. The modular principle of building a system from operationally independent functional blocks with an extension due to open standards (API, COM, etc.).
5. It is desirable to use a three-tier architecture:<сервер базы данных, сервер приложений, клиент>. The client can be "thick", "thin" or "super thin".
6. The system must be able to migrate from platform to platform. There must be versions for MS Windows, Novell NetWare and UNIX (and its clones).
7. The set of DBMS supported by the selected ERP system must necessarily include software common in Russia (for example, DB2, Oracle, Sybase, MS SQL Server, Informix, etc.).
8. Support for distributed information processing technologies, Internet / Intranet technologies with the ability to work through a "thin client". This technical solution allows the use of standard data storages (document libraries, databases) from local, corporate and global networks without requiring significant costs for additional administration and maintaining the integrity, reliability and security of data storage.
9. Support for technologies of multi-level electronic archiving of information on various media (disk arrays, CD-ROM, CD-RW, magneto-optical disks and libraries, tape libraries, etc.).
10. The presence of analytical capabilities and built-in tools (allowing you to independently increase the functionality of the installed ERP system).
11. Satisfactory performance characteristics(ease of administration, training, ergonomics of workplaces, Russian-language interface, etc.).

Evaluation of the effectiveness of implementation

The effectiveness of the implementation of a corporate information system should be assessed by the return on investment (return on the cost of investments). In this case, in the general case, the following indicators are taken into account.

Rice. 9.7.

The total cost of ownership (Total Cost of Ownership - TCO), including software, hardware, cost of external maintenance and operating costs, maintenance and salaries of specialists and personnel. On fig. 9.7 shows an approximate structure of the total cost of ownership.

Meta Group conducted a special study of the cost of ownership of an ERP system (TCO), which included hardware and software, as well as the cost of services and staff costs. The total included the cost of installing the system and a two-year implementation period during which the system is maintained, updated or upgraded and optimized. Among the 63 companies that participated in the study (they represented different industries and belonged to both small and medium-sized businesses and large businesses), the average TCO was $1.5 million (with a range of $400 thousand to $3.0 million). There are also estimates by foreign analysts that the cost-effectiveness ratio for the implementation of MRP / ERP systems is in the range of 0.25-2.0.

Implementation time (Time to Implement - TTI), in addition to which it is necessary to take into account the time it took to pay back the implementation (the total time is called Time to Benefit - TTB).

Return on Investment (ROI). According to a study by Meta Group, the average ROI after the implementation of ERP systems was $1.6 million per year. The Russian market has its own specifics for calculating the return on investment, but there are a number of cases when the funds spent on the supply and implementation of enterprise management software paid off fairly quickly. One such example is the implementation of the Everest financial and management accounting system (developed by the St. Petersburg company BIT) at OAO Vodokanal, St. Petersburg. After the introduction of approximately 100 Everest jobs in 15 branches of Vodokanal, by reducing at least half of the posts, the investment paid off in a year (in terms of at least savings in wages).

The total cost of an enterprise to implement an ERP system (Net Present Value - NPV), which includes the cost of software and hardware, services, salaries, costs after implementation and return on investment.

Features of the implementation of the ERP system

At its core, the implementation of an ERP system is not just the installation of an acquired software package, it is also a complex of labor-intensive measures both to reengineer the business processes of an enterprise and refine the implemented software, and to train employees of an enterprise to work with the system.

It is necessary to imagine the approximate cost of implementation. Sometimes it's better to buy an expensive and feature-packed system right away than to buy a few inexpensive software packages, the cost of customization and integration of which can exceed the price of a more expensive system.

You should also not save on the services of implementation firms, since independent implementation will require much more time and effort. In this case, the implementation team must necessarily fulfill the conditions below.

• Prepare control and test cases of the implemented software based on the data provided by the client. In this case, you can understand how fully the functionality already available in the system allows you to automate the main business processes of the enterprise and the approximate amount of necessary software refinement.
• Provide a detailed description of the implementation project (cost, content and timing of the stages, a detailed description of the expected results).
• To train specialists of the enterprise to work with the implemented system already at the stage of implementation.
• Participate in the preparation of the first after the introduction of the balance sheet of the enterprise and the necessary reporting forms.

A very important point in the preparation of the implementation agreement is a clear formulation of its terms, especially in relation to what the system being implemented should do. If the contract does not provide, for example, that the implementation company transfers data from legacy systems to the installed ERP system as part of the total cost of the contract, then it is incorrect to additionally require it to perform this voluminous and routine work for free. It is necessary to competently and fully draw up the terms of reference for the ERP system implementation project.

Employees of the enterprise must necessarily participate in the implementation project (at all its stages) in order to gain experience for the subsequent maintenance of the system. At the same time, the level of qualifications and abilities of the involved employees will directly affect the success of the entire implementation project. The more serious the attitude of the management to the selection of personnel for the implementation group, the greater the return on implementation will be received by the enterprise. Enterprise specialists included in the implementation group must be trained (the cost of which for Western ERP systems can reach hundreds of thousands of dollars).

When organizing an implementation project, it is necessary to clearly separate the consulting support for the implementation of the ERP system and the direct implementation of the ERP system. Implementation consulting support refers to the training and consultations of enterprise employees on various issues (setting up modules, the features of their use for solving specific problems at the stage of examination and implementation, etc.).

Consulting support is carried out by specialists-implementers. In turn, direct implementation (formation of a base of regulatory and reference information, modeling of activity processes, conducting trial operation of the ERP system and putting it into commercial operation) should be carried out by employees of the enterprise included in the implementation group.

In the process of implementation, the enterprise must receive not only a configured and functioning ERP system, but also its professionally trained employees who are able to independently accompany it (an important point is also additional material and moral incentives for employees of the enterprise participating in the implementation project).

The introduction of an ERP system is always accompanied by a certain adjustment (optimization) of both the organizational structure of the enterprise and the processes of its activities. At the same time, the main criterion for the need for changes should be considered their expediency in terms of ensuring the efficiency of the enterprise management process as a whole.

This problem is the main one and indicates that any advanced technology will be useful only if it is properly implemented and used. In many enterprises that have spent huge amounts of money on the acquisition and implementation of ERP systems, their launch has only led to negative results. It should be said that according to foreign analysts, up to 40% of ERP systems implementation projects fail. After a long, painful and expensive implementation, many enterprises eventually came to the conclusion that almost the same results could be achieved without installing ERP systems (for example, due to the usual optimization of business processes based on existing hardware and software) .

The Boston Consulting Group (BCG) report explored the problem of enterprise satisfaction with the results of their implementation of ERP systems. The study interviewed 100 IT managers who were responsible for the implementation of an ERP system in enterprises over the past 5 years. According to BCG analysts, ERP systems are vital for enterprises, however, the success of implementation depends on whether they were able to adapt as closely as possible to the business processes of the enterprise or, conversely, rebuild business processes to fit the standard functionality of the ERP system.

The results of the survey show that only every third company is satisfied with the results of the implementation of the ERP-system when assessed according to the criteria of pricing, cost effectiveness, real financial impact and achievement of goals. According to BCG, about 50% of ERP system users rate their financial, production and personnel applications as not meeting their goals (only about 30% rate the implementation of an ERP system as successful).

Quite indicative are other results of the BCG study. There are relatively few successful implementations. There is also no convincing evidence of the benefits for the enterprise from the introduction of an ERP system. While 60% of managers believe that their efforts to implement such systems have brought significant benefits, 52% believe that they have achieved their business goals, and only 37% report a noticeable positive financial effect after implementing an ERP system.

The survey also revealed an increase in customer dissatisfaction with ERP system developers. 15% believe that ERP developers do not focus on business goals, 33% believe that ERP developers only contribute to unnecessary expenses for their customers, and 12% simply terminated the contract with their first ERP supplier. In addition, many respondents believe that the cost of implementing an ERP system is too high. One in five who have implemented an ERP system in their enterprise believes that they could do the same for a lower price (they also believe that more than half of the costs were unnecessary). All interviewed managers consider lower cost ERP systems to be the best.

Rice. 9.9.

As experience has shown, the average cost of projects for the implementation of ERP systems that have received a positive assessment is 7-10 million dollars, and the average cost of a project with a negative assessment is up to 90 million.

According to research by the Gartner Group, in many cases a successfully implemented system does not fully realize its functions due to unsatisfactory use and maintenance. There are many reasons for this: insufficient preparedness of the enterprise, poorly trained personnel, lack of security policy, outdated network and electrical equipment, etc. (Fig. 9.9).

The quality of execution of the ERP-system implementation project also does not always satisfy the customer. In 58% of those with a positive assessment of the results of the implementation of the ERP system, project implementers completed them on time and within budget. A similar picture is typical for 33% of respondents with a negative attitude towards the results of the implementation of the ERP system.

There is also data from the Standish Group that only in 16% of cases the full-functional implementation of ERP systems is completed on time and within the planned budget. In almost 30% of cases, the implementation is terminated ahead of schedule, in other cases, the implementation project deadlines/budget are exceeded or the functionality provided for in the project is limited. In connection with all of the above, ERP system vendors prefer to talk about their experience of "productive" rather than "successful" implementations.

Difficulty in effectively integrating ERP systems with third-party applications

First of all, it concerns applications of electronic business (e-Business). If previously created ERP systems were designed to integrate a large part of the internal business processes of an enterprise (for example, managing warehouses, processing orders or making payments), now an increasing number of users want to integrate their internal system (Back-Office) with external system (Front-End), through which interaction with customers and partners is carried out.

The main reason for managers' dissatisfaction is the inability of ERP systems to successfully interact with e-commerce applications. How difficult it is to link ERP systems with e-commerce applications is also evidenced by the results of AMR Research.

Of the 800 companies surveyed, only 15% allow their customers and partners to check order status directly on the Web site, and only 5% to 10% allow them to complete transactions. According to various estimates, at present there are not so many electronic stores that have fully integrated with back-end systems. In some online stores, an order received via the Internet still first goes to an employee who manually enters it into the ERP system.

Limited analytical capabilities of ERP systems and insufficient support for decision-making processes

ERP systems are good at receiving and storing data, but when it comes to analyzing and processing information, the capabilities of ERP systems are very limited. The data schema used to manage enterprise resources is very complex. All corporate data is "inside" the ERP system, but they remain "hidden" and it is quite difficult to extract them for analysis. In addition, ERP-systems are not fully integrated with other applications and external sources of information, where data for analytical processing comes from.

For example, PacifiCorp (part of the ScottishPower group of 8,000 employees), which supplies electricity to 1.4 million consumers (domestic, commercial and industrial) in the 6 western US states, has implemented an ERP system SAP R / 3. After PacifiCorp integrated its legacy systems into the SAP R/3 environment, it became clear that critical business information needed to analyze the status of inventories, personnel, finances, customers, etc. became difficult to access. In fact, after the introduction of R/3, the ability to quickly access was seriously skeptical about this information. PacifiCorp had to additionally implement PowerConnect for SAP R/3 software and Informatica's PowerCenter software to access this information and integrate it with information stored in the customer service system.

If the current trends in the development of the Russian corporate software market continue in the coming years, it is possible to predict with a high degree of probability a sharp increase in competition between Western and Russian ERP systems, especially those intended for medium and large enterprises.

Baan IV (Baan) - http://www.baan.ru

iRenaissance (ROSS Systems) - http://www.rossinc.com

SyteLine (SYMIX) - http://www.frontstep.ru

MS Dynamics (formerly Axapta, Damgaard Data Int.) - http://www.microsoft.com

MFG/PRO* (QAD) - http://www.qad.com

SAIL (Corporation "Sail") - http://www.parus.ru

Galaxy (Corporation "Galaxy") - http://www.galaktika.ru

BOSS-Corporation (Company "IT") -

Translated from English, Enterprise Resource Planning (ERP) means "enterprise resource management". The ERP system is designed to plan the company's resources needed in production, procurement and sales.

The principle of operation of the ERP system is based on the creation, filling and use of a single database, which includes information necessary for all departments of the enterprise: accounting, supply departments, personnel, etc.

The functionality of ERP systems differs, however, there are functions that are common for all software products:

1. Development of plans for production, sales.
2. Maintenance of technological specifications that provide for the operations and resources necessary for the production of a particular product.
3. Determining and planning the needs for the production of components and materials, costs and deadlines for the implementation of the plan.
4. Purchasing and inventory management.
5. Managing production resources at various scales: from an enterprise or a separate workshop to a specific machine.
6. Financial management of the enterprise, management, accounting and tax accounting.
7. Project management.

Compared to other software solutions, an ERP system has a number of advantages:

• Creation of a unified information environment that greatly facilitates and optimizes the work of departments and management.
• The ability to distribute access rights between employees of any departments, from the head to the junior manager of the sales department.
• Availability of a wide range of solutions for organizations various types and scale.
• Ability to manage multiple divisions, enterprises, concerns, corporations.
• Compatible with various software products and platforms, high reliability, flexibility, scalability.
• Ability to integrate with systems and applications already used in the enterprise, in particular, with systems for design automation, process control, sales, workflow.

Along with other systems that automate production, ERP greatly simplifies the process of enterprise management, resource allocation and sales planning.

When do you need an ERP system?

At the first stages of the company's existence, there are no special needs for automation: all documents are developed using conventional office programs, and in order to get this or that information, the manager just needs to call the employee. Gradually, the number of documents, the number of employees, the volume of operations is growing, and there is a need to create storages and systematize data.

In an enterprise operating without ERP, all documents are often stored haphazardly, which greatly complicates management. There are also cases when some systems are still installed, but they work exclusively for a specific department.

Accounting, personnel, supply and other departments have their own databases, the workflow between which is difficult. This directly affects the efficiency of work: in order to find out this or that information in the personnel department, the accountant has to make a request by e-mail or call the personnel officer.

It is impossible to achieve effective management, optimization of resources of the entire enterprise and, finally, an increase in the productivity of various departments in such conditions.

ERP-system - the best choice for enterprises of any size, groups of companies, firms with geographically distributed branches.
ERP system:

• Significantly speeds up document flow between departments
• allows an employee with certain rights to get instant access to information
• makes it possible to effectively manage the work of remote branches and employees.

Also, various accounting programs are often offered as alternatives, created exclusively for the formation of financial and tax reporting.

Distinguishing ERP from other systems is quite simple. ERP system:

• integrates databases and tasks of ALL departments of the enterprise: from accounting and customer service to production and logistics;
• can help in the performance of any tasks of the enterprise;
• allows you to create a single information environment.

The main task of an ERP system is to optimize the management of ALL enterprise resources, regardless of the form in which they are presented. This is a single system that includes solutions for accounting, engineering department, supply department, personnel, warehouse, etc.

Such different ERPs

At the moment, there are two main concepts of ERP-systems. These are ERP and ERP II.

The first is understood as software that allows you to organize the work of an enterprise of any type and covers all production processes.

ERP II is a specialized management system that takes into account the key features of an enterprise. It is developed taking into account the tasks that need to be solved by a company of a certain size, type of activity, form.

There is a huge number of ready-made software developments specializing in small firms, manufacturing enterprises, companies operating in the service sector, trade organizations, etc. There are ERP systems designed for one standard enterprise, a company with geographically remote branches, and even a multinational company.

ERP systems can have a different structure. In particular, cloud ERP has recently gained the most popularity - more convenient, scalable and easy to use for medium and small businesses.

How to avoid unnecessary costs for an ERP system with the online program Class365

The implementation of a full-function ERP system in small and medium-sized businesses may not be cost-effective, both because of the high cost and the long implementation period.

You can automate the processes of a small company and avoid high costs using the Class365 online program. The online service allows you to automate the work of the warehouse, retail outlets, customer relationships. In the program, you will also be able to manage all financial flows. This solution is optimal for wholesale and retail trade enterprises, companies providing services, engaged in online sales.

The online solution is beneficial for the manager, since he does not need to additionally train the staff. The program, despite the wide functionality, is surprisingly simple and employees can master it on their own in no more than 15 minutes. In addition, the company does not have to squeeze into a tight budget to purchase a standard licensed application.