MODULE 4

ERPMARKET PLACE
OBJECTIVES

After going through this lesson, you will be able to:

Make an assessment of the ERP market

Identify the reasons for the growth of ERP market

Describe various types of ERP products
Define major players of ERP and their offerings

INTRODUCTION

Today, many organizations face continuous demands from rapidly changing and increasingly
competitive global markets. They also must serve customers who want innovative, high
quality products that feature special options. Additionally, further pressures are created by
technology developments that shorten many product life cycles and by intensified
international competition, which drives corporations to reduce costs and improve production
efficiencies.
To increase competitive .advantage, companies require flexible business information systems
that adapt to rapid change. To address these needs, enterprise business applications must
provide solutions that concentrate on the customer by integrating the
supply chain. These systems must allow information access throughout the enterprise and
provide software that adapts to the business. In addition, technical requirements include a
true client/server computing environment that supports relational database technology and
graphical user interfaces. Most importantly, these systems mustprovide open systems through
choice and integrate the complete supply chain infrastructure, connecting whatever systems
an organization has selected to meet its information technologyrequirements.
REASONS FOR THE GROWTH OF THE ERP
MARKET

There is no doubt that the market for Enterprise Resource Planning (ERP) systems is in

Enterprise Resource Planning

great demand. Industry analysts are forecasting growth rates of more than 30% for at
least the next five years. Why are so many companies replacing their key business
systems? The answeris:
To enable, improved businessperformance
Cycle timereduction
Increased business agility
Inventory reduction
Order fulfillment improvement
To support business growthrequirements
New products/product lines, new customers
Global requirements including multiple languages and currencies
To provide flexible, integrated, real-time decision support
Improve responsiveness across the organization

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To eliminate limitation in legacy systems
Century dating issues
Fragmentation of data and processing
Inflexibility to change
Insupportable tecn1ologies
To take advantage of the untapped mid-market (medium size organizations)
Increased functionality at a reasonable cost o Client server/open systems
teclu1ology
Vertical market solutions
These are some of the reasons for the explosive growth rate of the ERP markets and the
ERP vendors. As more and more companies are joining the race, the ERP vendors are
shifting their focus from big-Fortune 1000 companies to different market segments
(Medium size companies, small companies etc.). The future will see fierce battle for
market share and mergers and acquisitions for strategic and competitive advantage.

SAP

Company Profile

Founded in 1972, SAP (Systems, Applications and Products in Data Processing), based in
Walldorf, Germany, is the leading global provider of client / server business application
solutions. Today, SAP has installations in more than 107 countries.
SAP’s - ERP package comes in two versions: the mainframe version (SAP R/2) and the
client/server version (SAP R/3). Most prominent among SAP’s product range is the
enterprise application suite R/3 for open client/ server systems. With SAP Systems,
customers can opt to install the core system and one or more of the functional
components, or purchase the-software as a complete package.

Products and Technology

SAP products feature a sophistication and robustness unmatched by other business

software solutions. SAP has developed an extensive library of more than 800 predefined
business processes, spanning each functional software requirement. These processes may
be selected from the SAP library and included within installed SAP applications, after
tailoring the application solution to suit the user’s exact requirements. New business

Enterprise Resource Planning

processes and technologies become available regularly, enabling SAP customers to add
state of-the-art solutions to meet ever-changing business demands.

An Overview

R/3 employs a three-tier client/server architecture widely recognized by SAP customers,

technology partners and industry analysts as a winning approach to solving some of

Enterprise Resource Planning

today’s most demanding information-management challenges. The three-tiered architecture
separates a system into three functional layers, each structured to support the demands of its
function.
SAP has also incorporated and integrated the intranet and Internet technologies into
business solutions for its customers. Both internally and together with its partners, the
company is defining and creating a number of Internet standards-based interfaces,
applications and business processes that will extend the usefulness of SAP software in
entirely new ways and to new classes of customers.

Modules

R/3’s applications’ are modules. They can either be used alone or in combination with other
solutions. From a process-oriented perspective, greater integration of applications increases
the benefits derived. The following are the R/3 modules:
Financial Accounting Collects all the data in your company relevant to accounting, provides
complete documentation and comprehensive information, and is at the same time an up-to-
the-minute basis for enterprise-wide control and planning.
Treasury A complete solution for efficient financial management that ensures the liquidity
of your company worldwide, structures financial assets profitably and minimizesrisks.
Controlling A complete array of compatible planning and control instruments for company-
wide controlling systems, with a uniform reporting system for coordinating the contents and
procedures of your company’s internal processes.
Enterprise Controlling continuously monitors your company’s success factors and
performance indicators on the basis of specially prepared management information.
Investment Management Offers integrated management and processing of investment
measures and projects from planning to settlement, including pre-investment analysis and
depreciation simulation.
Production Planning Provides comprehensive processes for all types of manufacturing from
repetitive, make-to-order and assemble-to-order production, through process, lot and make-
to-stock manufacturing, to integrated supply chain management with functions for extended
MRP-II and electronic Kanban, plus optional interfaces for PDC, process control systems,
CAD and PDM.

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Materials Management Optimizes all purchasing processes with work flow driven
processing functions, enables automated supplier evaluation, lowers procurement and
warehousing costs with accurate inventory and warehouse management and integrates
invoiceverification.

Enterprise Resource Planning

Plant Maintenance and Service Management Provides planning, control and processing of
scheduled maintenance, inspection, damage-related maintenance and service management to
ensure availability of operational systems, including plants and equipment delivered to
customers.
Quality Management Monitors, captures and manages all processes relevant to your quality
assurance along the entire supply chain, coordinates inspection processing, initiates’
corrective measures and integrates laboratory information systems.
Project System Coordinates and controls all phases of a project, in direct cooperation with
Purchasing and Controlling, from quotation to design and approval, to resource management
and cost settlement.
Sales and Distribution Actively supports sales and distribution activities with outstanding
functions for pricing, prompt order processing and on-time delivery, interactive multilevel
variant configuration and a direct interface to Profitability Analysis and Production.
Human Resources Management Provides solutions for planning and managing your
company’s human resources, using integrated applications that cover all personnel
management tasks and help simplify and speed the processes.
BAAN COMPANY

CompanyProfile

Baan Company is a leading global provider of enterprise business software. Baan Company
offers a comprehensive portfolio of best-in-class, component based applications for front
office corporate office and back office automation. These applications are in use at over
7,000 customer sites worldwide. Baan Company products reduce complexity and cost,
improve core business processes, are faster to implement and use, are more flexible in
adapting to business changes and optimize the management of information throughout the
entire valuechain.

Baan Applications

Baan’s applications support a fully integrated, hybrid .manufacturing environment, offering

integrated applications that address the spectrum of manufacturing scenarios, like make-to-
stock, assemble-to-order, make-to-order and engineer-to-order.

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Baan manufacturing. This includes multi-site MRP, product configuration, project control
and critical path activity analysis capabilities. It manages repetitive and job shop production
and supply chain control for multi-site manufacturing.

Baan distribution and transportation. This section manages sales and purchasing, with
order processing, margin monitoring and contract administration capabilities. Additionally,
this module offers-comprehensive functionality for external logistics and transportation,
providing route optimization, transport order management; transport maintenance, and public
warehousing and packaging. It can be tightly integrated with Baan’s EDI module, enabling
rapid communication with clients and subcontractors.
Baan finance. It is a complete, integrated financial system that provides General Ledger,
Axed Assets, Accounts Payable and Accounts Receivable capabilities. It can be used as an
integrated portion of a complete Baan solution or in a standard mode for companies that only
require the financial management capabilities.
Baan service. It offers installation control, contract control, service order control and
invoicing.
Baan project. This is designed for the manufacturing and construction industries, and
supports the management of large projects through all stages, from estimating tenders to
delivery and throughout the guarantee period.
Baan process. This process delivers the key functionality required for process
manufacturers, including formulation and co-product/by-product management fully
integrated with discrete ERP for hybridenvironments.
Baan tools. Baan tools are a powerful 4GL application development environment that
provides end-users a fast, easy way to tailor Baan applications to achieve custom
implementation. Baan Tools’ open architecture enables users to develop applications that
are easily and seamlessly portable across multiple open systems hardware platforms,
operating systems, databases, user interfaces and networks. All Baan applications are
developed with Baan Tools, which also is available as a separate development product.
Orware. Baan supports its customers with a comprehensive set of pres ales and post sales
methodologies and services delivered by Baan directly or through a growing network of
alliance partners. Of ware offers customizable process models which are tightly linked to the

Enterprise Resource Planning

applications to speed implementation and end-user training, enabling companies to maximize
quickly their return on investment in their Baan system.

Baan Modules

Baan ERP, the successor to Baan IV, is a proven enterprise resource planning software
application. It is fully integrated and provides exceptional functionality across the enterprise.
Baan ERP consists of a number of interdependent components that can be deployed to meet
business needs. The flexibility within Baan ERP allows customers to maximize the benefits
of both best-in-class solutions and a fully integrated, high performance system. Baan ERP
includes the following components: manufacturing, finance, project anddistribution.

Manufacturing

Achieving flexibility, speed, and product quality in manufacturing operations can give a
definitive competitive edge in the market. Baan Manufacturing supports many types of
production management strategies, such as engineer to-order, make-to-order, assemble-to-
order, and make-to-stock. For example, the Master Production Scheduling module
assists business in day-to-day production control and long-term planning, and the Product
Configuration module streamlines the processing of configured products.
Manufacturing Module (includes Bills of Material, Cost Price Calculation, Engineering
Change Control, Engineering Data Management, Hours Accounting, Product Classification,
Product Configuration, Production Control, Production Planning, Project Budgeting, Project
Control, Repetitive Manufacturing, Routings, Shop Floor Control, Toor Requirements,
Planning and Control, Capacity Requirements Planning, Master Production Scheduling and
Material Requirements Planning)

Finance

Effective financial management is critical to business success, but a company’s managers

cannot manage what they cannot see. Baan Rnance delivers a high level of visibility for
financial transactions and drill-down capability that gives detailed transaction information
online.

Enterprise Resource Planning

Project

If a business executes customized projects for customers, comprehensive project control is

undoubtedly fundamental to its profitability. With Baan Project, companies have the control
needed to meet promised delivery dates and cost targets for even the most complex projects.
Baan Project manages all the aspects of projects and contracts, providing visibility for all
project activities and helping to ensure that delivery dates are met.

ORACLE CORPORATION

Company Profile

Oracle Corp. (founded in 1977) is the world’s second largest software company and the
leading supplier of software for enterprise information management. With annual revenues
exceeding $ 8.0 billion, the company offers its database, tools and applications products,
along with related consulting, education and support services. Oracle employs more than
41,000 people in more than 145 countries around the world. Headquartered in Redwood
Shores, California, Oracle is the first software company to implement the Internet computing
model for developing and deploying enterprise software across its entire product line:
databases and relational servers, application development and decision support tools and
enterprise business applications.
Oracle software runs on network computers, personal digital assistants, set-top devices, PCs,
workstations, minicomputers, mainframes and massively parallel computers. Oracle 8i, the
latest version of Oracle industry’s leading database, is the database for Internet Computing.
Oracle’s family of database, networking and gateway products enable corporations to access
any data, on any server, over any network, from any client device.
Oracle Applications is a.1eading provider of packaged and integrated front office and ERP
solutions for the enterprise and a division of Oracle Corporation, the world’s second-largest
software company and the largest supplier of software for information management. Oracle
Applications strategy is to offer all the enterprise solution components-proven applications
advanced technologies, business expertise and partnerships required-to enable customers to
execute strategies quickly, manage the risk of change and lead their respective industries.
Oracle Applications is the only suite of enterprise business applications from a major
Enterprise Resource Planning (ERP) vendor that follows the Internet Computing model. Each
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of the over 45 modules for financials, human resources, manufacturing, supply chain and
front office automation is web enabled, allowing it to be deployed on corporate intranets with
no software, other than a browser, required on users’ desktops. This architecture allows
companies to shift the complexity of application management,

Oracle Applications

A brief overview of the Oracle applications categories is given below:

Financials Oracle Financial Applications can transform a finance organization into a strategic
force. In today’s fast-moving corporate arena, organizations require access to critical financial
management functions. With Oracle Financial Applications, companies will be able to work
globally, lower their administrative costs, close their books faster and improve cash
management-while providing the strategic information required for making timely and accurate
decisions. .
Projects Oracle Projects Applications improve operational efficiency by providing an integrated
project management environment that supports the full lifecycle of every project in your
enterprise, increasing top-line revenue growth and bottom-line profitability. As the bridge
between operations systems and corporate finance, Oracle Projects Applications provide a
central repository of validated cost, revenue, billing and performance data associated with your
business activities or projects.
Human Resources Well-managed human resources directly improve the bottom line and
contribute to competitive advantage. The ability to hire, motivate and retain the most capable
workforce; engage employees and line managers directly in managing their skills and careers;
and provide comprehensive and up-to-date workforce information for management on a global
basis-are a few of the characteristics important for success. The Oracle Human Resource
Management System (HRMS) provides comprehensive facilities for organizations to achieve
such goals.
Manufacturing Oracle Manufacturing Applications the industry leading mixed mode
manufacturing solution that enables companies to achieve market leadership by becoming more
customer-responsive and efficient. This product family supports companies from small, single
facility environments to multi-plant, global manufacturers with complex requirements. Oracle
Manufacturing Applications help companies increase revenue, profitability and customer
loyalty by universally capturing demand, planning the extended enterprise in one rapid step and
Enterprise Resource Planning
by ensuring that the most efficient manufacturing process is used to produce eachproduct.
Supply Chain Oracle Supply Chain Management Applications simplify supply chain processes
by providing a single, integrated environment for managing the extended enterprise. From your
suppliers’ suppliers to your customers’ customers, Oracle enables effective trading partner
collaboration and supply chain optimization capabilities that are vital to gaining and sustaining
competitive advantage.

Enterprise Resource Planning