PACKAGED SOFTWARE

Packaged soItware is a ready-made application soItware, which is pre-build integrated soItware

designed to IulIill customers need. Packaged soItware, although ready-made, rarely comes ready-
to-run. It typically requires weeks or months oI conIiguration work to set it up Ior the speciIic
needs oI each individual business. This was an improvement on the previous generation oI
custom-built soItware, but today it is seen as inIlexible, and an obstacle to integration between
multiple applications. It includes; Enterprise Resource Planning, Supply Chain Management and
Customer Relationship Management solutions, etc.

1.0 Enterprise Resource Planning (ERP)
It is an integrated computer based system used to manage internal and external resources,
including tangible assets, Iinancial resources, materials and human resources. Multi-module
application soItware that helps organization manage its core business. Product planning,
inventory maintenance, supplier interaction, order tracking, Iinancial and HR management, etc
are major Iunctions oI ERP. Relational database system, client/server distributed architecture,
Business process analysis and retraining comes under ERP. It keeps rich Iunctionality across all
areas oI business. This package has its genesis in the manuIacturing sector and typically consists
oI a bundle oI industry independent modules that work together to deliver a complete solution
Ior the entire business.

1.1 Objectives of ERP:
O To Iacilitate the Ilow oI inIormation between all business Iunctions inside the boundaries
oI the organizations,
O To manage the connections outside stakeholders,
O To built on a centralized database and normally utilizing a common computing platIorm,
and
O It consolidate all business operations into a uniIorm and enterprise-wide system
environment.


1.2 Examples ERP Packages
O SAP AG
O RACLE
O PEPLEST
O BaaN
O AARS
O INTENTA
O "&A
O MARSHALL
O SSA

1.3 History
ERP (Enterprise Resource Planning) is the evolution oI ManuIacturing Requirements Planning
(MRP) II. rom business perspective, ERP has expanded Irom coordination oI manuIacturing
processes to the integration oI enterprise-wide backend processes. rom technological aspect,
ERP has evolved Irom legacy implementation to more Ilexible tiered client-server architecture.

1960s: Inventory Management and Control : Inventory Management and control is the
combination oI inIormation technology and business processes oI maintaining the appropriate
level oI stock in a warehouse. The activities oI inventory management include identiIying
inventory requirements, setting targets, providing replenishment techniques and options,
monitoring item usages, reconciling the inventory balances, and reporting inventory status.
1970s: Material Requirement Planning (MRP): Materials Requirement Planning (MRP) utilizes
soItware applications Ior scheduling production processes. MRP generates schedules Ior the
operations and raw material purchases based on the production requirements oI Iinished goods,
the structure oI the production system, the current inventories levels and the lot sizing procedure
Ior each operation.
1980s: ManuIacturing Resources Planning (MRP-II): ManuIacturing Requirements Planning or
MRP utilizes soItware applications Ior coordinating manuIacturing processes, Irom product
planning, parts purchasing, inventory control to product distribution.
1990s: Enterprise Resource Planning (ERP): Enterprise Resource Planning or ERP uses multi-
module application soItware Ior improving the perIormance oI the internal business processes.
ERP systems oIten integrate business activities across Iunctional departments, Irom product
planning, parts purchasing, inventory control, product distribution, IulIillment, to order tracking.
ERP soItware systems may include application modules Ior supporting marketing, Iinance,
accounting and human resources.

1.4 Challenges
The major challenges in Iront oI an ERP system are like:
O Application evelopment
O &pgrades
O Globalization
O Mergers, Acquisitions, and ivestitures
O Communicating IT Value

1.4.1 Application Development: this includes;
O Change Control
O Impact Analysis
O Testing and ocumenting
O Training and Support
O emand Management

1.4.2 Upgrades: this includes;
O evelopment reeze
O ealing with Customizations
O Hardware Requirements oI ther Applications
O Beware oI New eatures
O Intrateam Communication
O Client Commitment


1.4.3 Globalisation: this includes;
O Requirements eIinition
O Language Barriers
O ata Integrity
O Client Resistance
O ollow-the-sun Support

1.4.4 Financial Restructuring: this includes;
O &nderstanding the Business
O Asking the Right "uestions
O Collecting ata
O ClariIying Roles and Responsibilities
O Holding ebrieIing Meetings

1.4.5 Communicating IT values: this includes;
O Budgetary Crosshairs
O "uantiIying the BeneIits
O Providing Realistic Estimates
O Linking to New Technology

1.5 The Future of ERP
uture oI ERP Moves Irom client/server applications to Internet-based applications, Enterprise
applications Ior the Internet economy. Electronic commerce, sales Iorce customization, and
customer relationship management soItware. It aims at selI-service applications; eb-based
order entry, etc. The business model oI the 21st century is services on demand. In Iact,
companies like Zuora go even Iurther and have called the present model "the subscription
economy." Subscriptions enable businesses to change more rapidly, and the demands oI a
subscription economy oIten can't be met by legacy ERP.

1.6 Advantages of ERP
The reason Ior accepting ERP system replacing their old system are as Iollows:
Improve business perIormance through optimum utilization oI resources.
Reduction in manuIacturing cycle time by integrated planning process.
Better support customers in Iast changing in market condition.
Better cost control system mechanism by way oI accurate costing system.
Enhanced eIIiciency in control through Ieedback inIormation and online access to
accurate inIormation.
Establishment oI ecision Support System.

1.7 Selection Criteria
There are many ERP packages available in the market. Analyzing all the packages Ior choosing
the right one is a time consuming process. Thus, it is better to limit the number oI packages at the
begging Ior the purpose oI evaluation. Looking at the product literature oI the vendors, one can
eliminate the packages that are not at all suitable. Normally this evaluation process is done by a
committee. Presentation or demo Irom the selective vendors will provide some direction towards
choosing the best. I course, cost oI the package is also a key Iactor. Cost beneIit analysis is also
to be done.
The common criteria Ior selection oI a package:
! How best the package Iits the requirement oI Company
! Provision Ior accommodating the changes in system
! Implementation and post implementation support Irom Vendor
! Reliability oI Vendor
! Change in hardware and skill requirement
! Cost oI package and budget

1.8 Cost of ERP implementation
A budget is required Ior implementation oI an ERP package. It is not only the cost oI ERP
package but also there are many hidden costs that are to be considered. The Iollowing costs are
to be considered:
ERP package cost
Consultant cost
Cost oI data conversion
Cost oI training
Cost oI testing
Cost oI post implementation support

1.9 Business Modules
All ERP packages contain a set oI modules. These modules are related to diIIerent Iunctional
areas like inance, ManuIacturing and Production planning, Material Management, Selling and
istribution and so on. These modules in a business systems have close relationship. An ERP
system takes care the Ilow oI inIormation Irom diIIerent modules and understanding the
interactions among them.


1.9.1 Manufacturing module: It has the Iollowing sub-system:
O Material & capacity planning
O IT
O Engineering data management
O Cost management
O "uality management
O ConIiguration management
O Tooling, etc
Modu|e of Lk ackage
llnanclal ManagemenL
Puman 8esource
Sales ulsLrlbuLlon
MalnLenance ManagemenL
CuallLy ManagemenL
MaLerlal ManagemenL
ManufacLurlng ManagemenL
1.9.2 Finance module: In an ERP system, inance module will have Iollowing sub-systems:
O inancial accounting
O Investment management
O Controlling
O Treasury

1.9.3 HR Module: It includes:
O Personnel management
O rganizational management
O Payroll Accounting
O Time management, etc.

1.9.4 Material management module: It includes:
O Material procurement planning
O Purchasing
O Vendor evaluation
O Inventory management
O Material inspection, etc

1.9.5 Sales & distribution module: It includes:
O Master data management
O rder management
O arehouse management
O Shipping
O Billing
O Pricing
O Sales support
O Transportation
O oreign trade, etc.


1.10 ERP implementation Life cycle
ERP implementation project involves diIIerent phases which have deIinite activities as explained
below.
1. Pre-evaluation screening: to search Ior perIect package which will be most suitable in
terms oI Iunctional Iit oI the business process, skill set available and easiness to adopt.
2. Package evaluation: to understanding the perIormance oI the business and do the cost
beneIit analysis.
3. Project planning phase: to make a tentative plan Ior implementation in terms oI time,
identiIication oI person responsible Ior coordination oI the implementation programmes,
skill development and monitoring the progress.
4. Gap analysis: to identiIy the gap between the existing system and Iuture expectations
Irom the ERP system so as to optimize the outcome Irom the implementation programme.
5. Re-engineering: to bring the necessary changes in the system in terms oI physical system,
hardware, mindset oI the people, data Ilow and reporting.
6. ConIiguration: to install the necessary hardware, data base management system and
conIiguration oI the ERP system accordingly.
7. Testing: to test the system with test data set like entering data, validating them and
generating reports Ior all modules and checking their correctness.
8. End user testing: to impart training to people Irom diIIerent Iunctional areas who will be
associated with operation and handling reports.
9. Going live: to Iinally switching over to new system with data migration and running the
system with live data oI all Iunctional areas.
10. Post implementation: to arrange Ior maintenance oI the system in terms oI provision to
technical expertise in cases oI problems.

1.11 Implementation Methodology
The methodology oI implementation oI ERP system involves diIIerent activities like
understanding the need Ior the system, beneIits to be derived, people to be associated, need Ior
their skill updates, database conIiguration etc. Generally an ERP implementation can be divided
into Iour phases, like:
1. &nderstanding the problem
2. eIining solution
3. &ndertaking technical work
4. Going live
5. Post implementation maintenance

2. 0 Supply chain management (SCM)
A supply chain is deIined as a set oI three or more companies directly linked by one or more oI
the upstream and downstream Ilow oI products, services, Iinances and inIormation Irom the
source to a customer. It is the management oI a network oI interconnected business involved in
the ultimate provision oI product and service packages required by end customers. It spans all
movement and storage oI raw material, work-in-process inventory, and Iinished goods Irom
point oI origin to point oI consumption. Management is on the verge oI a major breakthrough in
understanding how industrial company success depends on the interactions between the Ilows oI
inIormation, materials, money, manpower and capital equipment. The way these Iive Ilow
systems interlock to ampliIy one another and to cause change and Iluctuation will Iorm the basis
Ior anticipating the eIIects oI decisions, policies, organizational Iorms and investment choices.

2.1 Advantages of Supply Chain Management
Corporations have turned increasingly, to global sources Ior their supplies. This
globalization oI supply management has Iorced companies to look Ior more eIIective
ways to coordinate the Ilow oI materials into and out oI the company.
Companies and distribution channels compete more today on the basis oI time and
quality.
Making a deIect-Iree product and selling it to customer Iaster and more reliably than the
competition is no longer seen as a competitive advantage but simply as a requirement in
the market.
Customers demand products consistently delivered Iaster, exactly on time and with no
damage.
Each oI these necessitates closer coordination with suppliers and distributors.
This global orientation and increased perIormance-based competition combined with
rapidly changing technology and economic conditions all contribute to market place
uncertainty.
This uncertainty requires greater Ilexibility on the part oI individual companies and
distribution channels, which in turn demands more Ilexibility in channel relationships.

3.0 Customer Relationship Management (CRM)
CRM reIers to the methodologies and tools that help businesses manage customer relationships
in an organized way. The main objective is to learn more about the needs and behavior oI
customers. It helps to build stronger relationships with them. There are technological terms
involved in CRM. But, thinking oI it primarily in technological terms is a mistake. Major
Iunctions oI CRM include:
O evelop better communication channels
O Collect vital data, like customer details and order histories
O Create detailed proIiles such as customer preIerences
O eliver instant, company-wide access to customer histories
O IdentiIy new selling opportunities

Referances

O Amer B., Principles oI InIormation System, Boyd & raser Publishing Company,
Massachusetts, 1992.
O O'Brien J. and Marakas J, ntroduction to nformation Systems, 14/e, Mc Graw Hill
Publication.
O InIormation Systems, ICAI Study Material, New elhi, 2007.
O http://www.looselycoupled.com/glossary/packaged20soItware
O http://www.systems-rp.com/?idrazdel1106
O http://www.slideshare.net/prithwis/bis11-erp
O http://www.youtube.com/watch?vu1Cp6&7HuY
O http://www.box.net/shared/ntjzi671dl
O http://www.Ilatworldknowledge.com/pub/gallaugher#web-41220
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