Information systems for resource planning and enterprise management: ERP systems. ERP system structure

When financial resources were added to those taken into account during planning, the term ERP (Enterprise Resource Planning) appeared - resource planning on an enterprise scale. The difference between MRP II and ERP concepts is that the former is production oriented while the latter is business oriented. For example, the customer's credit conditions for the shipment of finished products are within the scope of ERP, but not MRP II. OLAP tools, decision support tools - belonging to ERP, but not MRP/MRP II systems.

ERP is an accounting-oriented information system for identifying and planning throughout the enterprise the resources needed to accept, manufacture, ship and record customer orders. An ERP system differs from a typical MRP II system in technical requirements such as a graphical user interface, a relational database, the use of a fourth generation language and the latest computer aided design tools, a client/server architecture, and open system portability. ERP systems automate the internal activities of an enterprise (back-office).

Since the second half of the 90s, there has been a need to develop ERP systems, including automation tools for externally facing functions (front-office). As a result, CRM (Customer Relations Management) and SCM (Supply Chain Management) systems emerged - managing relationships with customers and suppliers, respectively.

CRM (customer relationship management) is an enterprise resource management methodology focused on sales and customer relationships. In a more general sense - management of individual functions of the sales force and technologies for automating these functions (for example, HelpDesk).

To expand functionality when organizing the sphere of interaction between an enterprise and its customers, the CSRP (Customer Synchronized Resource Planning) concept is aimed. Corporate resources covered by the CSRP system serve such stages of production activities as the design of a future product taking into account the specific requirements of the customer, warranty and service.

ERP II systems (Enterprise Resource and Relationship Processing) are the development of ERP systems, management of internal resources and external relations of the enterprise. The interconnection of all subsystems is shown in Fig. 10.2.

Fig. 10.2. Interrelation of subsystems of planning and enterprise resource management

6. Classification of erp systems

There are quite a lot of classification criteria by which both domestic and Western ERP systems can be divided. These include:

functionality (first of all, the difference is manifested in the presence or absence of a production control module);

the scale of the enterprise that the solution is aimed at;

cost of the system implementation project (licenses and services);

implementation timing;

the software and hardware platform used (technical platform, operating system, DBMS server);

availability of industry solutions (it is advisable to use for ERP systems with a production module) and a number of others.

In this regard, the most interesting classification of systems is based on integral indicators. In accordance with this classification, all systems can be divided into 3 groups.

1)Local systems. As a rule, they are designed to automate activities in one or two areas. Often they can be a so-called “boxed” product. The cost of such solutions ranges from several thousand to several tens of thousands of dollars.

2)Financial and management systems. Such systems have much greater functionality, but their distinguishing feature is the absence of production modules. And if in the first category only Russian systems are represented, then here the ratio of Russian and Western is approximately equal. The implementation time for such systems can vary by around a year, and the cost can reach hundreds of thousands of dollars.

3)Medium and large integrated systems. The difference between these systems is quite arbitrary and lies in the presence or absence of industry-specific solutions depending on the scale of the enterprise, including its territorial distribution. The implementation period for such systems can be several years, and the cost ranges from several hundred thousand to several tens of millions of dollars. It should be noted that these systems are intended, first of all, to improve the management efficiency of large enterprises and corporations. In this case, the requirements of accounting or personnel records fade into the background.

In table 10.1 shows some of the Russian and Western systems available on the domestic market, which to one degree or another can be classified as ERP systems.

Table 10.1. Characteristics of ERP systems

Continuation of the table. 10.1

End of table. 10.1

As can be seen from this table, the range of possible solutions is quite large. It should be noted that modern ERP systems are characterized by the development of new functionality associated with going beyond the traditional framework of optimization and automation of transaction processes within the enterprise. This mainly concerns the automation of supply chains (the so-called Supply Chain Management procedures, SCM - supply chain management) and customer relationships (Customer Relationship Management, CRM - customer relationship management). At the same time, the traditional control loop inherent in the ERP system is now called back-office applications (or internal system), and extensions directed “outside” the enterprise are called front-office applications.

Test questions and assignments for topic 10

What tasks are assigned to corporate IP?

What requirements are put forward when developing and implementing a CIS?

List the main tasks of MRP systems.

What functions do MRP II systems perform?

Describe MRP II processes.

What tasks does an ERP system perform?

What is the difference between MRP II and ERP systems?

What subsystems support work with customers and suppliers?

Give a classification of ERP systems.

What ERP systems do you know? Give them a brief description.

The ERP concept evolved from the simpler concepts of MRP (Material Requirement Planning) and MRP II (Manufacturing Resource Planning).

There is an opinion that the ERP concept is an improved version of the MRP II concept. But this is not true, because there are significant differences between these two concepts. The main difference is that ERP moves away from “inventory” management schemes and considers the interests of the client as one of the most important planning factors.

The ERP concept assumes that the system uses only one integrated program instead of several separate ones. A single system manages processing, distribution, logistics, inventory, delivery, invoicing and accounting.

The system for differentiating access to information, implemented in ERP systems, in combination with other company information security measures, is designed to prevent both external threats (for example, industrial espionage) and internal ones (for example, theft). Implemented together with a quality control system, ERP systems are aimed at maximizing the satisfaction of the enterprise's needs for business management tools.

The ERP concept includes:

The ERP concept has such an important feature as the ability to globally manage production, goods and services. This feature is very important for large international corporations, where subsidiaries and divisions interact with each other, while being located in different countries and regions.

The software tools used in ERP systems make it possible to carry out production planning, generate the flow of orders and evaluate the possibility of their implementation in the departments of the enterprise.

An ERP system, unlike an accounting system, is, first of all, a resource planning system. It analyzes not only activities for previous and current periods, but also compiles future results. ERP systems are not just a data warehouse. They include resource planning and optimization modules, and most of the accounting functions are aimed at supporting the functioning of these modules.

To implement planning and optimization functions, the system must have feedback. Based on management goals, a plan is first drawn up, then in the process of performing work, the enterprise’s performance indicators are recorded and analyzed. By comparing the goals set and the results achieved, a corrective action is developed. And the accounting system only records the results. It does not contain functions for automating planning and comparing planned and actual indicators. In other words, accounting systems perform only a small analytical part of management, but not a synthetic one. This is the main difference between the concept of an ERP system and an accounting system.

In recent years, ERP systems have become the standard in all areas of business. Today there is no clear, generally accepted definition of ERP. You can find different definitions of this class of solutions, as well as many synonyms: integrated enterprise management systems (EMS), automated enterprise management systems (EMS).

Let's try to answer the question: “ERP - what is it and what is it for?”

What is an ERP system

ERP stands for Enterprise Resources Planning, that is, “ enterprise resource planning" The Russian translation of the abbreviation does not help to immediately understand the essence of the term, so let’s turn to history.

The spread of personal computers in the 80-90s of the last century opened up wide automation opportunities for businesses. Software solutions have replaced manual labor and paper in accounting tasks, warehouse accounting, document flow, and monitoring the operation of technological equipment.

Important features of the new approach were not only the transfer of data into digital data, new opportunities for transmitting and analyzing information, but also the integration of data flows of different nature. Now top management and heads of departments received a complete picture of the enterprise’s work, the ability to analyze production load, warehouse stocks and financial flows. Based on this data, more informed decisions were made, and it became possible to effectively plan resources.

This approach to organizing information systems in an enterprise is called ERP, and application solutions for its implementation are called EPR systems. Perhaps this is the simplest and most comprehensive answer to the frequently asked question: “CRM, ERP - what is it?”

You will be surprised, but accounting automation programs, project management, HR applications - all these are components of an ERP system, its basic functions. Customer relationship management systems, or CRM (customer relationship management systems), are also part of ERP.

However, today the listed functional systems are rarely classified as ERP. This is because accounting, project management, CRM and some other functions have become popular as independent software modules. Indeed, many companies use only electronic accounting, and the remaining data is simply entered into Excel.

Arguing about whether accounting and CRM should be classified as ERP or considered as separate solutions is a thankless task. Let's leave it to market analysts. It is obvious that the trend towards automation is increasing every year. The listed systems will only gain popularity: sales of licenses and the volume of implementation services will increase.

Why implement ERP?

ERP systems help solve monitoring and planning problems. In addition, they speed up the work of each department and specific employees. Here are the results of some ERP implementations:

• top management can at any time get an idea of ​​the current situation or analyze the company’s activities for a selected period;
• the time spent on routine operations has been reduced by an order of magnitude, and the risks associated with the human factor have also been reduced;
• the company received a logical and transparent document flow;
• every employee and manager has information (and only what is really necessary).

ERP systems immediately reduce the cost of servicing production and business processes. In the long term, a positive effect is achieved due to the fact that strategic decisions are made more carefully. A business without an ERP system can be compared to a driver who drives a car with his eyes closed.

The enterprise resource management system is not only the driver’s vision, but also the summary data of all devices, recorded and taken into account in a single system. ERP is the control of the interaction of engine mechanisms and systems over time, thanks to which the driver can easily determine when to slow down and where to accelerate to achieve maximum results.

The feasibility of implementing ERP systems

If ERP systems are so good, then the natural question is: why today have not all enterprises carried out total informatization, and many are generally limited to only electronic accounting?

The reason is this. For an ERP system to be effective, it must take into account the business processes of the enterprise as clearly as possible. Some companies simply cannot formalize their business processes due to poor business culture. Others find it difficult to decide to make any changes in their activities, especially if “everything is working the way it is.”

In any case, the process of implementing custom ERPs is neither quick nor cheap. In addition to money, it also requires the time of key managers. And if incorrect logic is built into the system, then automation can negatively affect both the company’s performance and employee morale. That is, during implementation it is important to attract experienced and competent specialists. It may actually make more sense for some companies to continue working in Excel.

Types and components of an ERP system

ERP systems as large integrated systems can be classified according to the following criteria:

1. Universal platforms and industry systems. Industry systems are focused on specific business processes. This means that they either have special modules (for example, for calculating orders in printing houses), or standard functions in them have their own characteristics (for example, at distilleries, parallel warehouse accounting of products converted into alcohol is maintained). Universal platforms are rarely sold “as is” because there are no typical businesses. And they, as a rule, are also customized for a specific client and his business processes.
2. Systems for managing holdings and individual enterprises. Everything is simple here. There are solutions for one business entity and complex systems that combine and transmit data across a network of enterprises. Regardless of the type of ERP, the characteristic delivery components include software modules that implement the functions of financial, accounting, customer relationship management (CRM), human resources (HR), sales, supply chain, production and production assets, and planning. A common ERP functionality is project management. At the top level, modules are created for the company's top management that aggregate information from lower levels and from individual departments. Here, management reporting is generated, which helps make the right decisions. In conclusion, we note that optimization and control of business processes are an urgent need when conducting any commercial activity. The best proof of the necessity and effectiveness of ERP systems is the positive dynamics that companies that have gone through the path of successful implementation begin to demonstrate.

Annotation: ERP systems and business opportunity management. Composition of the ERP system. The main differences between MRP and ERP systems. Features of the selection and implementation of an ERP system. The main problems of implementing and using ERP systems.

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

9.1. ERP and Business Capability Management

In the early 90s. Analytical company Gartner Group has introduced a new concept. Systems of the MRP II class 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 used.

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. The presence of 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 to the personnel system). Such a system also ensures simultaneous access to information by any number of enterprise employees with appropriate authority. The purpose of ERP systems is not only to improve the management of an enterprise's production activities, but also to reduce 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:

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

As originally defined by the American Production and Inventory Society (APICS): "ERP is a method for effectively planning and controlling all resources necessary 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’s activities (Fig. 9.1). The software tools used in ERP systems allow for production planning, modeling the flow of orders and assessing the possibility of their implementation in the services and departments 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:

• maintaining design and technological specifications that determine the composition of manufactured products, as well as the material resources and operations necessary for its manufacture;
• formation of sales and production plans;
• planning the requirements for materials and components, timing and volumes of supplies to fulfill the production plan;
• inventory and procurement management: maintaining contracts, implementing centralized procurement, ensuring accounting and optimization of warehouse and workshop inventories;
• production capacity planning from large-scale planning to the use of individual machines and equipment;
• operational financial management, including drawing up a 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 drawing up schedules, since for solving even seemingly simple discrete planning problems for a distributed distribution network, ordinary algorithms become ineffective due to the large dimension of the processed data.

At the end of the 90s. In the 20th century, the methodology “Enterprise Resource Planning, synchronized with consumer requests” (Customer Synchronized Resource Planning - CSRP) was also developed, which covers the interaction of the enterprise with customers: issuing an order, technical specifications, 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 sales of a 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 an ERP II system, the basis of which is managing the company’s interaction with the external environment. Where possible, internal and confidential processes become external and open. The excessive secrecy of corporate information that complicated operations disappears. It is being replaced by a clearly regulated policy in the field of information security and the security of the information systems themselves.

The combination of an ERP system with OLAP technologies, a Balanced Score Card system and a functional cost management system led to the emergence and development of BPM (Business Performance Management) systems - business performance management, which allow linking the operational results of an enterprise with the effectiveness of mission implementation 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 materials from the 2004 Data Warehousing Institute (DWI) report “Best Practices in Business Performance Management: Business and Technical Strategies.” This report positions BPM systems by analyzing the overall development pattern of software for automating business processes over the past twenty years (Fig. 9.2).

First, automation systems for internal (back-office) processes appeared, primarily production (inventory management and automation of production line management) and accounting. Then came the turn of processes of interaction with the external environment (front office processes): supplies, sales, services, marketing. At the end of the twentieth century, organizations moved to automate cross-sectional processes affecting the work of several departments, introducing customer relationship management (CRM) technologies and supply chain management (SCM) technologies. And finally, the top of the pyramid, which began to be automated quite recently, is corporate governance. To solve this problem, the world identifies a special class of software - BPM systems.

The movement up the levels of the pyramid reflects a gradual transition from automation of operational business processes to automation of business management strategy. Processes at higher levels of the pyramid control processes at lower levels. Thus, BPM systems are designed to automate strategic planning for business development and, at the same time, to support tactical (or operational) management of business processes at different levels. The task of BPM systems is to help implement strategic business goals in real conditions. To do this, they must provide the user with the right information at the right time to improve 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 quickly working with business data that is accumulated in a 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? 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 target business indicators (key performance indicators) and plan the quantitative values ​​of their metrics (Key Performance Indicators - KPI). Strategic planning is based 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 guidelines for the development of tactical (operational) plans. The main tool for operational planning is budgeting of various aspects of the enterprise's activities.

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

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

ERP systems are focused on automating management processes, supporting 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 senior management and field managers and specialists was available in the ERP system. This situation is further aggravated 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, personnel and external contractors within general 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 management decisions and their practical implementation) and as an information system (a set of software tools that support the BPM ideology and ensuring its practical implementation). This does not mean, however, that the BPM system “cancels” or “replaces” ERP. Figure 9.3 shows the 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 played by the so-called Data Maps modules - a means of unifying data obtained from various sources and bringing them into line with unified 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.

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 (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, using the solution a holistic infrastructure is created to support coordinated 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 to individual management tasks.

9.2. Composition of the ERP system

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

The information access control system implemented in ERP systems is designed (in combination with other enterprise information security measures) to counter both external threats (for example, industrial espionage) and internal ones (for example, data theft). Implemented in conjunction with quality control systems and customer relationship support, ERP systems are aimed at maximizing the needs of companies 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 specific point in time, determine the demand of distributors, demand within the enterprise, etc.

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

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

Basic production plan (product release schedule). Products are determined in final units (products) with production times and quantities.

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

Product specifications. 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 plan for material requirements.

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

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

Checking and adjusting workshop capacity plans.

Purchasing, inventory, sales management.

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

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

Project/program management.

Personnel Management.

In addition, for ERP systems it is almost mandatory to have the ability to electronically exchange data with other applications, as well as simulate a number of situations related, first of all, to planning and forecasting.

In accordance with modern requirements, an ERP system must, in addition to the core that implements the MRPII standard (or its analogue 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, previously called the sales automation module - Sales Force Automation);
• electronic commerce (Electronic Commerce - EU);
• product data management (PDM);
• Business Intelligence add-ons, including solutions based on OLAP (On-Line Analytical Processing) and DSS (Decision Support Systems) technologies;
• stand-alone module responsible for configuring the system (Standalone Configuration Engine - SCE);
• final (detailed) resource planning FRP (Finite Resource Planning).

If there are practically no problems with the acquisition of a small, usually “out of the box” system, then with medium-sized and, especially, large systems, everything is much more complicated.

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

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

• high cost of the purchased product (up to several million dollars);
• wide variety of ERP systems offered;
• duration of training of specialists on the product being introduced;
• pre-sales 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 best ERP system in the world will not be able to solve all the problems of the enterprise.

Any ERP system is, first of all, a tool for increasing 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 running 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 management of the enterprise as a strategic investment.

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

Currently, Russian systems demonstrate good development dynamics, however, Western systems are still richer in functionality. Another peculiarity of Western systems is that they have been developed (and refined) for several decades in accordance with global principles of effective business management (without tax evasion, double-entry bookkeeping, etc.). That is, in Western systems the so-called “correct” (“civilized”) model of doing business is much better implemented. This advantage is also their disadvantage (in relation to Russian conditions), since Western ERP systems are less suited to working with complex, inconsistent and illogical business models, which 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 cost.

If an enterprise decides to implement Russian enterprise management software, then in this case it is impossible to say how “good” or “bad” the system is - in each specific 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 advantages its implementation will give the company. It is necessary to understand in detail what an ERP system can provide for a business, what goals it will allow to achieve and what impact it can have on the profitability of the enterprise and the cost of its products. It is always necessary to take 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 “S.M.A.R.T. system”: goals must be Specific, Measurable, Adjusted, Relevant and have certain deadlines for execution (Time of Execution). It is desirable that the answer to this question can be formalized and presented visually in numbers and diagrams (the amount of money saved, higher turnover of goods, reduced time for working with suppliers and clients, etc.). The basic requirements for the ERP system must be formulated and approved by the management of the enterprise:

• what goals of economic activity and business objectives as a whole will be achieved by the purchased and implemented system;
• 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.

At the same time, it is very important to clearly determine the current and future needs of an enterprise or organization. You need to have a good understanding of what drives the business, what factors are critical for success and what is necessary for the development of the company. Requirements must be formalized in the form of a special document (Vision Scope), in which all the desired characteristics of the ERP system are identified and prioritized.

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) on upgrading its local or global networks, then this option may not be profitable. In general, the implemented ERP system must correspond to the existing financial and technological level of the enterprise.

It should also be understood that the greatest effect is achieved with the comprehensive implementation of an ERP system. It makes no sense to spend huge amounts of money on a system whose capabilities will not be fully used, or a system that will need to be constantly updated.

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

The client company must be confident in the high quality and timeliness of future upgrades of the installed ERP system (when new versions appear), in solving all problems related to its flexibility and scalability. If the implementation of an ERP system is carried out by a 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 organize a tender between ERP system providers. Organizing a tender will significantly reduce the initial delivery price and better understand the capabilities of both the proposed systems and their developers.

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

The implementation of an ERP system should be carried out by an implementation company (or, in some cases, a development company) in close contact with the IT department and the relevant interested departments of the enterprise. After implementing an ERP system, certain types of work to modernize the system can be entrusted to external consultants of the development company (consulting firm), and its general 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 “home-written” systems makes it possible to obtain the most suitable IP for a company’s business, but ultimately makes the company dependent on its own developers.

Rarely does such a self-developed software product remain viable for long enough. There is usually no corresponding complete and up-to-date documentation for it. It cannot be said that it was professionally tested at the stages of development and commissioning and is reliably supported (an example of this is, at least, the Krupskaya confectionery factory in St. Petersburg, which had to quickly switch from legacy systems to the Parus software product due to the departure of its leading 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 support conditions;
• the company 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 operation of the created software during trial operation;
• there is the possibility of real support of the created system on our 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 development company, its time on the market, the reputation of the system itself and the total number of successful implementations. However, the reputability of the company is not the main factor of choice. Many market newcomers (who do not have annual turnover of millions and thousands of clients) offer interesting solutions based on modern technologies and at a very reasonable price. A large number of implementations may also be due to marketing rather than the actual quality of the system. There are at least several known cases when enterprises changed their ERP systems several times, having brands well-known on the Russian market (both Western and Russian). The main reason for replacing these systems was the insufficient functionality of the systems, low speed, low scalability, poor quality of support when it was necessary to improve the systems, etc.

Number of successful implementations in Russia. First of all, we mean complex implementations. It is also important to know whether there are implementations at related industry enterprises, and whether the help of external consultants was required. It is also necessary to see how the system actually works at at least one or two sites and communicate 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 In cases, they are even harmful, since advertising publications can form an inadequate idea of ​​the ERP system for an unprepared manager!).

However, you should always remember that any (even extremely functionally rich) ERP system is customized to the needs of a specific enterprise (and twin enterprises, even within the same industry, simply do not exist). In this case, it is important to understand whether the development company is able to “add” the supplied system to the functionality required by the customer company within a reasonable time. It should be remembered that in some cases the costs of finalizing the system and its subsequent maintenance may exceed the base cost.

Flexibility and openness. This is one of the most important factors in choosing an ERP system. In accordance with international experience, the period for a fully functional implementation of an ERP system usually lasts at least 3 years, and it must be fully operational for at least 10 years. During this time, the enterprise changes 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 the technology for supporting business processes and templates of reporting forms through parametric configuration. The system should be easily customizable and integrated within the enterprise's IIS 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 regard is that all necessary modifications to the system must be made by the development 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. The documentation should be complete and understandable, and the terminology should be familiar. In turn, the accompanying documentation for the Russian system must also be complete and understandable.

Quality of localization of the Western system. The Russian economy has its own specifics (legal, accounting, tax, etc.). In design and technological preparation of production in Russia, the standards ESKD, ESTD and ESPD (Unified System of Design, Technological and Program Documentation) are universally adopted. Western enterprises have adopted a closed organization of production, while in Russia technological specialization is more common. In the West there is a non-guild management structure, but in Russia it is a guild structure. The system must also take into account such Russian realities as chains of offsets, prepayment, payment in non-cash form, the possibility of off-balance sheet (“gray”) cash, etc.

A 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 successfully implemented projects, real support for changes in Russian legislation in the implemented and maintained system.

Geographical proximity of the development company or implementing company. It is easier and more convenient to interact with a company whose employees can promptly (within a matter of hours) appear at the enterprise where the system they have implemented operates. Geographical proximity is also important when it is necessary to refine the system, since the development company usually always includes travel expenses in the cost of modification (we must not forget about the increase in the duration and inconvenience of the modification project if the development company is located far enough away).

Acceptability of system price. It should be taken into account that for the entire cycle of installing an ERP system (purchase, implementation, maintenance, development) you will have to spend several times more money than purchasing the software itself (with a coefficient of 3.0-10.0). At the same time, the more complex and expensive the ERP system being implemented, the higher the coefficient will be.

Possibility of modular system acquisition. To save money, it should be possible to purchase and implement an ERP system modularly and only for the required number of jobs. Purchasing a complete set of system modules at once is not the best option, since all modules will only be implemented in a few years, and during this time some of them may already be outdated (like the system itself).

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 "Criteria for selecting an IS" is given in Table 9.2.

Basic technical requirements for an ERP system

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

1. Possibility of integration with a large number of software products (with a minimum level of integration - at the level of open command line code or support for the OLE Automation standard).
2. Ensuring security using various methods of controlling and limiting access to information resources. The presence in the ERP system of software and hardware information security tools certified by FAPSI (allowing data encryption, supporting electronic digital signatures and authenticating users based on it). The effectiveness of software security tools can also be significantly increased through the use of hardware and biometric tools (hardware keys, tokens, smart cards, fingerprint, retina, voice, face, digitized signature, etc.) recognition devices that have recently appeared on Russian market.
3. Scalability to work with a different number of client locations and the possibility of system development.
4. The modular principle of building a system from operationally independent functional blocks with expansion through open standards (API, COM, etc.).
5. It is advisable to use a three-tier architecture:<сервер базы данных, сервер приложений, клиент>. The client can be “thick”, “thin” or “ultra-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 DBMSs 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 you to use standard data storage (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 for multi-level electronic archiving of information on various media (disk arrays, CD-ROM, CD-RW, magneto-optical disks and libraries, tape libraries, etc.).
10. Availability of analytical capabilities and built-in tools (allowing you to independently increase the functionality of the installed ERP system).
11. Satisfactory operational characteristics (ease of administration, training, ergonomic workplaces, Russian-language interface, etc.).

Evaluation of implementation effectiveness

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

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

Meta Group conducted a special study of the cost of ownership (TCO) of an ERP system, which included hardware and software, as well as service costs and personnel costs. The total amount included the costs of installing the system and a two-year implementation period, during which the system is maintained, updated or expanded and optimized. Among the 63 companies participating in the study (they represented different industries and belonged to both small and medium-sized and large businesses), the average TCO value was $1.5 million (with a range from $400 thousand to $3.0 million). There are also estimates from foreign analysts that the cost-effectiveness ratio when implementing 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 recoup the implementation (the total time is called Time to Benefit - TTB).

Return on Investment (ROI). According to Meta Group research, the average ROI after implementing ERP systems was $1.6 million per year. The Russian market has its own specifics for calculating return on investment, but there are a number of cases where funds spent on the supply and implementation of enterprise management software have been recouped quite quickly. One such example is the implementation of the Everest financial and management accounting system (developed by the St. Petersburg company BIT) at Vodokanal OJSC, St. Petersburg. After introducing approximately 100 “Everest” jobs in 15 branches of Vodokanal, due to the reduction of at least half of the positions, the investment paid off within a year (in terms of at least savings on salaries).

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

Features of implementing an ERP system

At its core, the implementation of an ERP system is not just the installation of a purchased software package, it is also a set of labor-intensive measures for both reengineering the enterprise’s business processes and refining the implemented software, as well as training enterprise employees to work with the system.

It is necessary to imagine the approximate cost of implementation. Sometimes it is better to immediately buy an expensive and feature-rich system than several inexpensive software packages, the cost of modification and integration of which may exceed the price of a more expensive system.

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

• Prepare control and test examples of the implemented software based on 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 development.
• Provide a detailed description of the implementation project (cost, content and timing of stages, detailed description of expected results).
• Train enterprise specialists to work with the implemented system already at the implementation stage.
• Participate in the preparation of the first balance sheet of the enterprise after the implementation of the system and the necessary reporting forms.

A very important point when preparing an implementation agreement is the clear formulation of its terms, especially regarding what the system being implemented must do. If the contract does not stipulate, 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 free of charge. It is necessary to competently and completely draw up technical specifications 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 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 management’s attitude to the selection of personnel for the implementation group, the greater the return on implementation the enterprise will receive. Enterprise specialists included in the implementation group must undergo training (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 distinguish between consulting support for the implementation of an ERP system and the direct implementation of an ERP system. Implementation consulting support means training and consultation of enterprise employees on various issues (configuring modules, features of their use to solve specific problems at the survey and implementation stage, etc.).

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

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

The implementation 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. In this case, the main criterion for the need for changes should be considered their feasibility from the point of view of ensuring the efficiency of the enterprise management process as a whole.

This problem is fundamental 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 system implementation projects end unsuccessfully. After a long, painful and expensive implementation, many enterprises eventually came to the conclusion that almost similar results could be achieved without installing ERP systems (for example, through the usual optimization of business processes based on existing hardware and software) .

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

The survey results indicate that only every third enterprise is satisfied with the results of implementing an ERP system when assessed according to the criteria of pricing, cost efficiency, real financial impact and achievement of set goals. According to BCG, about 50% of ERP system users rate their financial, manufacturing and HR applications as not meeting their goals (only about 30% rate their ERP system implementation as successful).

Other results of the BCG study are also quite indicative. There are relatively few successful implementations. There is also no convincing evidence of the benefits for the enterprise from the implementation 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 impact 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 costs for their clients, and 12% simply terminated the contract with their first ERP vendor. In addition, many respondents believe that the cost of implementing an ERP system is too high. Every fifth person who has implemented an ERP system at their enterprise believes that they could have done the same for a lower price (they also believe that more than half of the costs were unnecessary). All managers surveyed consider lower-cost ERP systems to be better.

Experience has shown that the average cost of projects for the implementation of ERP systems that 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 Gartner Group research, in many cases a successfully implemented system does not fully implement 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. For 58% with a positive assessment of the results of implementing an 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 implementing an ERP system.

There is also data from the Standish Group that only in 16% of cases the full-featured implementation of ERP systems is completed on time and within the planned budget. In almost 30% of cases, 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 providers 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, this applies to e-Business applications. If previously created ERP systems were designed to integrate a large part of the enterprise’s internal business processes (for example, managing warehouse operations, processing orders or making payments), now an increasing number of users want to combine their internal system (Back-Office) with external system (Front-End), through which interaction with clients and partners is carried out.

The main reason for managerial dissatisfaction is the inability of ERP systems to successfully interface with e-commerce applications. AMR Research's research also illustrates how difficult it is to link ERP systems with e-commerce applications.

Of the 800 companies surveyed, only 15% allow their customers and partners to check order status directly on their Web site, and only 5% to 10% allow them to complete transactions. According to various estimates, at present there are not many electronic stores that have full integration with server 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 do a good job of 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 it remains “hidden” and is quite difficult to extract for analysis. In addition, ERP systems are not fully integrated with other applications and external sources of information from which data for analytical processing comes.

For example, PacifiCorp (part of the ScottishPower group, 8,000 employees), which supplies electricity to 1.4 million consumers (home, commercial and industrial) in 6 western US states, has implemented the SAP R/3 ERP system. After PacifiCorp integrated its legacy systems into the SAP R/3 environment, it turned out that critical business information needed to analyze the status of inventory, personnel, finances, customers, etc., became difficult to access. In fact, after implementing R/3, the ability to quickly access I was seriously at a loss for this information. PacifiCorp had to additionally implement PowerConnect for SAP R/3 software and PowerCenter software (developed by Informatica) to provide access to this information and integrate it with information stored in the customer service system.

If the current trends in the development of the Russian enterprise software market continue in the coming years, one can with a high degree of probability predict a sharp intensification of competition between Western and Russian ERP systems, especially those intended for medium and large enterprises.

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

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

On the practical side, when talking about ERP business systems, they mean software for automating 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 words, ERP systems are complexes of activities that include: models for managing information flows in an enterprise, equipment for storing and processing it, software, IT department and technical support specialists, as well as users themselves.

Construction of an IT enterprise resource planning system

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

• Platform- the main environment (core), which ensures the operation of program components, as well as the basic functionality (reference information, functions) of the company. This is the basis of the system, without which its operation is impossible.
• Data Management Tools- this includes storage on the server, programs for processing information and transferring them for the operation of modules.
• Plug-ins- programs independent from 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 disrupting 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 divided into three groups:

1. Domestic- programs used within the enterprise, to which employees have access.
2. External- programs to which clients and partners have access (for example, the personal account of a dropshipper intermediary).
3. Connectors- programs for connecting with other software products that are not part of the ERP system, but are 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 is taken into account, which will not give a tangible effect. At the same time, a system implemented in this way is usually 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 make the right choice in accordance with 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

The classification of enterprise resource planning systems is carried out according to several parameters, taking into account which will help you in choosing the appropriate product. Thus, according to their purpose, they can be sectoral or general. The first option is suitable for very large companies, as well as for enterprises that produce a unique product or use non-standard business methods.

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

• Public- many users have access to the general functionality of the program, but your data is available only to employees of your company.
• Private- the program is isolated and can be changed and modified to suit the company’s tasks.
• Hybrid- a combination of two types.

By type of information storage:

• Cloud- databases are located on external servers.
• Domestic- 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 provided through the company 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- unified comprehensive programs.

By license class:

• Proprietary- closed software that requires a license fee to use.
• Open Source- free open source programs.

Errors in choosing a resource planning system

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

• Lack of a correctly chosen and clearly formulated goal. It is important to understand that ERP should improve the company's performance, adopting positive aspects and compensating for negative ones. Therefore, when choosing, it is necessary to determine exactly what effect should be obtained from the implementation. If your goal is to optimize your business as a whole, you won't get the results you need. All tasks must be specified in the technical specifications (TOR). At the same time, the system must 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.
• Incorrect choice of methodology for solving problems. Each ERP system is built for a specific business area. It can be adapted for the production sector or exclusively for trade.
• One-sided view on system selection. The team of specialists who compose the technical specifications, select and control the system implementation process should include representatives of various departments of the company (IT, sales, personnel, production). Otherwise, the final product will be selected from the standpoint of the convenience of only one user group and will not bring the required efficiency to the enterprise as a whole.
• Insufficient qualifications of the developer and specialists carrying out implementation. The process of creating and integrating a resource planning system is expensive and many companies, in an effort to reduce costs, turn to companies with little experience or use free ERP systems, which is quite risky.
• Low level of control over the process of program integration into the system.
• Interface complexity. If a program is too complex to be intuitively understood, you may face the challenge of having to train staff to use it. This 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 decisions is reporting documentation. It is this that is the basis of ERP work, 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:

• Ensuring convenient document flow. The main purpose of ERP systems is to ensure quick execution of documentation (invoices, invoices, reports, price lists), as well as subsequent operations with them (search, access, forwarding, editing).
• Planning. The system algorithm, especially for production, should allow planning payments, deliveries, warehouse operations, seasonal changes, and production volumes. For each company, production planning is individual and tied to the volume-calendar strategy.
• Transparency of information. 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 company's work, most of which must remain closed to lower-level employees, clients and partners, it must allow some data to be closed to users with different access.
• Unified data network. The ERP system must provide the ability to track all individual processes (for example, transactions) at all levels from the purchase of raw materials and production, to registration of sales and payment of taxes.
• Personnel accounting. The program should provide for the ability to control the number of personnel, plan exit schedules and hours worked, take into account the level of qualifications of employees and draw up vacation schedules and advanced training courses. An effective planning system also 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 a database of suppliers, send requests for availability, plan the formation of orders, release of working capital and payment of invoices, control the delivery process, and also maintain procurement reporting.
• Working with clients. The system should allow for complete records of data for each client, regardless of how many legal entities are included in the latter’s structure. This implies not only the ability to allow the client to work through his own account, but also storage of data on completed transactions, accounts receivable, supply planning, invoice processing, and cooperation history. This allows you to study the demand and level of profit received from each client.
• Service and repair. If we are talking about production, this part of the program should provide planning for technical inspection of equipment, a schedule for scheduled repairs, modernization or replacement of enterprise equipment. For trading enterprises, the system should provide for the possibility of accounting for service maintenance of sold goods and repairs under warranty obligations.

Features of ERP implementation

The resource planning system operates on databases, of which there are usually a lot. The information itself can be located on various media, including paper documentation, and therefore its transfer to electronic format is a huge job. The data itself is divided into two groups:

• Important- information that is the basis of the enterprise’s activities. This is data on work and production management, reporting from the sales department and personnel officers. They must be used in the ERP system.
• Are common- information that is important for a specific company, which is not used by the company on a regular basis, but is also important. This data is added to the system as needed or at the request of company management.

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

Based on what data should be used and the required functionality of the system, a technical specification is drawn up. It is an official document (instructions) demonstrating what tasks and goals need to be achieved during the implementation process. Based on the technical specifications, a calendar plan for integration work is drawn up.

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

1. Step-by-step integration- first, the main modules are put into operation (for example, financial accounting, bookkeeping and document flow), and then, after debugging their work, the rest are gradually introduced. This method takes a lot of time and cannot demonstrate results immediately. It is often used by companies when developing their own systems.
2. Comprehensive implementation- the system is applied immediately in all directions and in full, and then the work is gradually debugged. This method allows you to quickly integrate an enterprise resource planning system. It is used when purchasing ready-made software.
3. Combined method- the implementation of ERP systems occurs immediately in all areas of activity, but in stages. This strategy allows you to minimize implementation time with the least loss of quality of work. Most often, this technique is used by private companies offering custom software development services.

How an ERP system works and who needs it

Considering the complexity and high cost, the implementation of ERP will be advisable only for large companies, where the volume of accounting data 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 produces 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 from consulting agencies, is the use of ERP systems by small companies operating in conditions of very high competition, 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 (reducing inventories, speed of production, staff reduction, increasing labor productivity), and as a result, it should bring additional profit for the enterprise itself or, at least, reduce costs.

Brief overview of popular ERPs

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

Popular free products:

• ERPNext- a minimalist program for the work of a private entrepreneur (IP). The main disadvantage is 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 a 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 average 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 selecting software.

Disadvantages of Resource Planning System Integration

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

• Program complexity and, as a consequence, the high cost of purchase and implementation.
• Increased requirements for equipment for data storage and processing, including servers for storing backup copies. It must be reliable and fast, which determines its high cost.
• The need for additional data protection, careful monitoring of the security system and setting up an access hierarchy. Storing information in electronic format, and especially with access via the network, increases the risk of theft or destruction (intentional or accidental) of important documents.
• Dependence on the company's energy supply. If there is a problem with the electrical network in a company's offices, warehouses or sales areas, the company's operations can come to a complete halt.

Practical advantages of an ERP system

Implementing a strategy and software for accounting and resource planning is an effective way to achieve improvements in the company's performance, which has the following advantages:

• Possibility of integration into various types of production and rapid adaptation to a wide range of enterprise activities. The ERP system is suitable for industrial complexes, banking organizations, trading enterprises, and the service sector.
• Support of planning methods for various areas of the company's activities.
• Possibility of building a virtual enterprise.
• High-quality financial accounting for all departments.
• 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, making it available to many departments.

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