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ERP UNIT 3 Notes

Enterprise Resource Planning (Galgotias University)

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UNIT-3

Market Dynamics: Definition and Examples

What Are Market Dynamics?

Market dynamics are forces that will impact prices and the behaviors of
producers and consumers. In a market, these forces create pricing signals
which result from the fluctuation of supply and demand for a given
product or service. Market dynamics can impact any industry or
government policy.

There are dynamic market forces other than price, demand, and supply.
Human emotions also drive decisions, influence the market, and create
price signals.

KEY TAKEAWAYS

● Market dynamics are the forces that impact prices and the
behaviors of producers and consumers in an economy.
● These forces create pricing signals that result from a change in
supply and demand.
● The basis of supply-side economics is on the theory that the supply
of goods and services is most important in determining economic
growth.
● Demand-side economics holds that the creation of economic
growth is from the high demand for goods and services.
● Economic models cannot capture some dynamics which affect
markets and increase market volatility, such as human emotion.
Understanding Market Dynamics
Market dynamics are the factors that change the supply and demand
curves. They form the basis of many economic models and theories.
Because market dynamics impact the supply and demand curves,
policymakers aim to determine the best way to use various financial
tools to stimulate or cool down an economy. Is it better to raise or lower

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taxes, increase wages or slow down wage growth, do neither, or do

both? How will these adjustments affect supply and demand and the
general direction of the economy?

There are two primary economic approaches when it comes to changing

the supply or demand in an economy with the ultimate goal of impacting
the economy positively. One has a basis on supply-side theory and the
other has a demand-side base.

Dynamics of Supply-Side Economics

Supply-side economics, also known as "Reaganomics," or "trickle-down
economics" is a policy made famous by the 40th U.S. President, Ronald
Reagan, based on the theory that more significant tax cuts for investors,
corporations, and entrepreneurs provide incentives for investors to
supply more goods to an economy, which results in other added benefits
that trickle down to the rest of the economy.

Dynamics of Demand-Side Economics

The opposite of supply-side economics is demand-side economics,
which argues that the creation of effective economic growth comes from
the high demand for products and services. If there is a high demand for
goods and services, consumer spending grows, and businesses can
expand and employ additional workers. Higher levels of employment
further stimulate aggregate demand and economic growth.

Demand-side economists believe tax cuts in general can stimulate

aggregate demand and move an economy that has significant
unemployment back towards a full employment scenario. However, tax
cuts specifically for corporations and the wealthy may not end up
stimulating the economy. In this case, the additional funds may not
increase the demand for goods or services. Instead, it could be argued
that the incremental income generated may go back into stock buybacks
that boost the market value of the stock or to executive benefits but do
not end up materially stimulating the economy.

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Dynamics of Securities Markets

Economic models and theories attempt to account for market dynamics
in a way that captures as many relevant variables as possible. However,
not all variables are easily quantifiable.

Models of markets for physical goods or services with relatively

straightforward dynamics are, for the most part, efficient,
and participants in these markets are assumed to make rational decisions.
However, in financial markets, the human element of emotion creates a
chaotic and difficult-to-quantify effect that always results in
increased volatility.

Greed and Fear in the Markets

Competent and professional traders determine entry and exit points of
any investment or trade using proven quantitative models or techniques.
They define the appropriate plan of action and follow it exactly. Through
the practice of strict money management, the execution of trades
happens without deviating from the well thought out, predetermined
plan. Emotion seldom influences the decision-making process of these
traders

Real-World Example
Consumer demand can at times be a powerful market dynamic. As
explained in a study by The NPD Group, consumer spending is on the
increase, particularly for luxury fashion items, such as footwear,
accessories, and apparel.

According to the January 2019 NPD study, sales of luxury fashion items
have increased as new brands have emerged and online retail platforms
have created a more competitive landscape while gaining market
share due to buyer demographics and preferences.

As demand for luxury apparel increases, manufacturers and brands will

be able to raise prices, which will stimulate the industry and boost the
overall economy.

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. The dominance of cloud

You’re probably familiar with the rise of Cloud ERP and might even
consider this old news. However, cloud adoption is accelerating at a
previously unseen rate in small-to-midsize businesses since 2016,
estimated to grow the Cloud ERP market to about $30 billion in 2021.
This makes a lot of sense when you consider some of the main benefits
of using Cloud ERP: lower TCO, easier management, improved security,
and wider access, to name a few. As more small companies with fewer
IT employees can now take advantage of an enterprise technology they
wouldn’t otherwise be able to afford, new challenges and needs arise.
S/4HANA Cloud takes full advantage of its cloud nature by integrating
its entire portfolio of business capabilities (including CRM and HR)
with intelligent technology and real-time analytics that open previously
untouched competitive advantages for SME’s. SAP is focused on
continued evolution towards the cloud future and the growth opportunity
this represents for both their enterprise-level and small-to-midsized
customers.
2. Analytics in everything
Legacy systems are very effective at collecting and organizing company
data but tend to struggle with limitations in analytics and reporting.
We’re already living in the age of data-driven-decision-making-or-die
3. ERP as part of a broader digital transformation strategy
For a moment, it seemed as if ERP was being pitched as a cure-all
solution and the centerpiece of your digital transformation. While ERP
still plays a fundamental role in your digital transformation, there has
been a change in philosophy.
4. Industry 4.0
The fourth industrial revolution is experiencing rapid growth and
development. We’re starting to see an increased use of artificial
intelligence, machine learning, IoT, and other new technologies in day-
to-day business processes

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5. The experience economy

A term that is beginning to sound more familiar in 2019 is the
“experience economy”. This constitutes an enormous change in
philosophy as to how businesses deliver their products and services to
their customers, with client/user-experience playing a central role
Functional Modules of ERP Software

ERP software is made up of many software modules. Each ERP

software module mimics a major functional area of an organization.
Common ERP modules include modules for product planning, parts
and material purchasing, inventory control, product distribution, order
tracking, finance, accounting, marketing, and HR. Organizations
often selectively implement the ERP modules that are both
economically and technically feasible.

However, it is not necessary that every enterprise system application will

have all modules mentioned above. Some organizations intending to use
customized ERP software generally implement specific ERP
modules that are technically feasible and also economical to implement.
Such business organizations approach ERP Software Company with
their enterprise resource planning software requirements and ask them to
study and design enterprise system software as per their business
requirements. Let’s take a look at some main functional modules
of Enterprise resource planning system in detail.

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ERP Integration: What It Is and How It Works

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ERP Integration: What It Is and How It Works

An ERP integration is the method of connecting your ERP software with
other systems. The integration allows for the flow of information
between your systems.

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It’s a way of automating business processes and improving productivity

across the enterprise.

● Custom integrations, which refers to a business building its own

core integration. Programmers can match a software’s API code
with the ERP system they want to integrate with. They require
technical resources and take time.
● Vendor-built or native integrations, which refers to out-of-the-
box integrations that allow you to connect specific applications.
For example, many tools today connect directly with Shopify. They
cover popular use cases and typically don’t have additional
subscription costs.
● Integration Platform as a Service (iPaaS), which is a cloud-
based solution that builds and deploys integrations. With iPaaS,
organizations can create workflows that connect cloud-based
applications and deploy them without installing or managing

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hardware.

Upgraded legacy systems

In today’s competitive business environment, organizations are
discovering they have no choice but to add a modern ERP system. A
recent report from Panorama Consulting Group revealed that
homegrown legacy systems are still prevalent, with 35% of
respondents moving away from them in 2020, up from 14% the year
prior.
Software bought years ago may no longer support the company's
business model. An ecommerce brand may go global or need more
internal procedures. These reasons can turn a legacy system ineffective.
Automated processes
One study found that 70% of back-office executives are looking for
advanced automation in an ERP. These integrations facilitate automated,
bi-directional data exchange between your systems and apps, eliminating
costly human errors. Automation can be used across numerous
touchpoints to streamline business processes.

The following activities can all be passed between systems to create an

intelligent ERP system:

● Order information
● Customer data
● Shipping details
● Accounting systems
● Product and price information
● Inventory counts
● Purchase orders

What is supply chain in ERP?

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Supply chain management (SCM) involves planning, execution,

control, and monitoring of supply activities. An ERP solution takes
care of physical aspects of supply that includes storage and
transportation and the market aspect of effectively managing demand
and supply to meet customer demands.

The Role of ERP in Supply Chain Management

Supply chain management plays an important role in the overall success

of a business, especially for the manufacturing industry. Manufacturers
rely on partners and vendors to supply them with the right type and
amount of resources at the necessary time to keep production moving
according to schedule. However, and according to a recent 2021 State of
Manufacturing Report, “97% of respondents report supply chain
management consumes a significant amount of employee’s time.”
Supply chain management can be a cumbersome and time-consuming
process if not managed efficiently, and ineffective management can
inhibit productivity, cause delays, affect quality, and result in
unnecessary expenses and profit loss.

https://www.qad.com/blog/2021/09/the-role-of-erp-in-supply-chain-
management#:~:text=What%20Is%20the,in%20other%20areas

Benefits of Using ERP in a Supply Chain Management Strategy

Adding ERP software to your supply chain management strategy is a
game changer. Some of the primary ERP supply chain benefits users
experience that lead to measurable business growth include the
following.

Efficient Managing Demand & Procurement

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ERP automates demand planning, creating demand upon receiving

orders. When an order is received, the software implements scheduling.
Team members are able to see real-time information about how
resources are being used in production and can better plan production
jobs and product delivery. Warehouse resource management,
transportation of materials, and other supply chain tasks can be auto

Reliable Processing & Documentation

An ERP system can also create invoices, which are sent straight to the
customer once products have shipped. Or, create and transmit required
import and export documentation required for cross-border shipments. It
automatically collects an archive of shipment and delivery data as well
to reduce errors and ensure on-time delivery and better customer service.

Enhanced Collaboration
ERP and supply chain management processes are especially helpful in
streamlining coordination between businesses and vendors. When
suppliers are connected to your ERP system, they can work more
effectively with you to meet your goals and reduce bottlenecks, such as
recognizing when certain supply inventories are low and ensuring
resource availability.

Increased Visibility
With more visibility and transparency, businesses can create smarter
strategies around how they use their resources, from parts to personnel.
ERP software can give your team a detailed, real-time look into your

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operations so you can see where things are going well and where they’re
not, allowing you to target specific inefficiencies for better outcomes.

Cloud Capabilities
Though ERP systems are available as on-premise solutions, cloud
ERP software has become popular in recent years. The major benefits of
cloud ERP are dedicated data security and mobility. Using a cloud-
hosted ERP solution means that the system can be accessed anywhere,
anytime on mobile devices as long as there’s an internet connection. This
allows for quicker action without the need for team m

How Does ERP Improve Supply Chain Management & Efficiency

Outside of more effective forecasting, planning, and collaborating, ERP
is instrumental in supply chain efficiency in another area: business
disruption. Market disruptors are inevitable to virtually every industry,
and when one hits yours, you have to be ready to adapt quickly and
successfully to get the job done.
The COVID-19 pandemic has shown how necessary proper preparation
and responsiveness are to keeping businesses above water.
Manufacturers are now focusing less on cost savings and more on supply
chain adaptability, risk management, and speed, with the goal of creating
flexible sourcing and more connected supply chain networks to respond
to customers’ needs. Greater visibility, accelerated decision-making,
rapid responsiveness, and other performance improvements are
necessary to strengthen supply chain operations and prevent major
setbacks when business disruptions occur.

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Unit-IV ERP Implementation Basics

What are the 5 major steps in the ERP implementation?

Image result for ERP Implementation Basics
The six-part ERP implementation phase lifecycle includes discovery and
planning, design, development, testing, deployment and support.

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...
What Are the Phases of an ERP Implementation Plan?
Discovery & Planning. What is the first phase of ERP
implementation? ...
Design. ...
3. Development. ...
Testing. ...
Deployment. ...
Support & Updates.

RP Implementation Process Overview

The implementation of ERP includes various steps and phases, most
typically consisting of:

ERP software installation

Settings and options configuration
Transfer of financial and transaction data from the old system (aka data
migration)
Setting up employees (or “users”) with defined roles, ERP system
access, and security settings
ERP software training for end users
Depending on the implementation approach you choose (more on that

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below) and the complexity of your business processes, ERP software

implementation could take anywhere from two months to two years …
sometimes more.

In other words, the timeline for a financial services company

implementing core accounting modules like General Ledger, Accounts
Payable and Accounts Receivable is going to be faster and less complex
than a manufacturing business also needing shop floor and production
modules, inventory and purchasing, order processing and all the
additional configuration, workflow processes, and data that comes with
it.

What are the ERP Implementation Steps?

The first step in an ERP implementation is to mobilize the project team.
On the customer side there’s typically an executive sponsor, various
business process owners, and the end users. On the ERP partner side (or
“technology provider”), there will be business analysts, technical
consultants, and a project manager.
Project management is critical to communicating the system
implementation progress, managing issues quickly and effectively, and
achieving the defined objectives.
With the team strapped in and ready, it’s time to lay out the ERP
implementation process which will often include:
● Defining the scope of the implementation, project milestones,
customizations needed, process maps, and expected results.
● Analyzing the business requirements, installing the software in a
“sandbox” environment, and configuring the system to match the
necessary process workflow.
● Migrating and mapping data into the new system and performing
verification checks.

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● Testing the system across all departments and consistently testing and
running through the quote-to-cash cycle.
● Training end users in their specific functional area based on roles and
permissions. The “train the trainer” approach is widely used, whereby
select users are trained on the system and then act as internal trainers.
● Software deployment into the production environment, often referred to
as the “go-live.” This will require extra man power to monitor the
process and ensure a smooth transition.
● Post go-live support and project review.

What’s the Best Implementation Method?

Two of the most popular methods are big bang ERP implementation
versus a phased approach.
With big bang ERP, your entire system goes live and everyone in our
company is transitioned at the same time. In short, you’re taking all of
the modules across all departments live at once. This approach can
shorten the ERP implementation timeline, but can also cause more
disruption to the daily business operations and place more strain on
employees.
Alternatively, a phased approach will see the ERP system rolled out
sequentially, often by module or functional area. This implementation
methodology, also known as “land and expand”, will take longer as
portions of the new ERP software are gradually implemented over a
measured period. This method may help alleviate risk and anxiety on
internal staff.
There are pros and cons to both ERP implementation methodologies.
Your techn

How Long Does an ERP Implementation Take?

There’s no such thing as one-size-fits-all when it comes to answering the
question how long does it take to implement an erp system. One

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business may only need to upgrade their financials while another may be
a manufacturer with thousands of SKUs, multiple warehouses, and
products that ship around the world. A basic ERP system implementation
could take as little as two months where a more complex system could
span multiple years. However, an average mid-market ERP system
implementation like Sage or Acumatica ERP will take around four to six
months.
It’s good to remember that an ERP implementation is usually not a
straight path, but a windy one. Ideally, the software would meet all of
your functional needs right out-of-the-box. But more realistically, there
are often third party software integrations or ERP customization that
needs to happen in order to meet all of your specific business
requirements. As such, these additional considerations can extend the
ERP system implementation time-frame.

ERP Implementation Go-Live and Beyond

Once all ERP implementation phases are complete and the system is
live, you can take a well-deserved exhale. All hands will still be on deck
for the next several weeks as employees adjust to the new system and
processes, but the hard work is behind in the rearview mirror and your
new ERP system should soon start paying dividends.
Once the dust settles, you’ll want to review and measure how the project
achieved the goals that were outlined at the beginning. The system
should be reducing manual processes, improving productivity, and
bringing greater visibility and insight across all business units and your
entire operations.

ERP Implementation Life-Cycle

Enterprise Resource Planning (ERP) is made to automate any task. With
ERP, it is easy to manage every department under one single database.
This consumes not much time and is easy and fast way to do work with.
Developed in 1990s, Enterprise Resource Planning is foundation
system for domestic and global operations, supporting most or all

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functional areas in their daily operations. Is one of the more common

categories of business software, especially with large-scale businesses.
It is business strategy and set of industry-domain-specific applications
that build customer and shareholder communities value network system
by enabling and optimizing enterprise and inter-enterprise collaborative
operational and financial processes. ERP at its core is an effective way
of centralizing information and workflow processes through data
management. Because ERP keeps all of your workflow data in one
place.

Different phases of ERP Implementation :

1. Pre-evaluation screening :
This phase starts when company decides to go for ERP system. For
this, search for package starts. It is time-consuming process because
every package has to analyze first before reaching to any decision. As
all packages are not same and each has its own strengths and
weakness. This process should eliminate those packages that are not
suitable for company’s business processes.
2. Package Evaluation :
It is the most important phase in implementation. This phase depends
on success and failure of entire project with package selection. Most
important factor while selecting any package is that not every
package can be totally perfect for project but at-least it should be
good fit for project.
3. Project Planning Phase :
This phase plans and designs implementation process.
4. Gap Analysis :
It is the most crucial phase in this implementation. Here, gaps are
analyzed between company’s practices and that practices which are
supported by ERP package. It has been estimated that even best ERP
package only meets 80-85% of company’s functional requirements.
5. Re-engineering :

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It is the fundamental rethinking and radical redesign of business

processes to achieve improvements.
6. Customization :
It is the main functional area of ERP Implementation. Arrived
solution must match with overall goals of company. Prototype should
allow for thorough testing and attempts to solve logistical problem.
7. Implementation Team Training :
Now after above processes, implementation team knows how to
implement system. This is phase where company trains its employees
to implement and later run system.
8. Testing :
This is the phase where team break system. Sometimes, system
overloads or multiple users trying to login at same time etc. Test cases
are designed specifically to find weak links in system. Different types
of testing are: Unit testing, integration testing, acceptance testing,
security testing, performance and stress testing.
9. Going Live :
Once technical and functional side is properly working and testing is
done. There comes next phase i.e, “Going Live”. Once system is
‘live’, old system is removed & new system is used for doing
business.
10. End-User Training :
This is the phase where user of system is given training on how to use
system. Employees and their skills are identified and training is given
to them in groups based on their current skills. Every employee is
provided with training of job which he is going to perform.
11. Post-Implementation :
It is the most important and critical factor. Post Implementation is
based on two words- Operation and Maintenance of system. Duration
of this phase depends on training efficiency. Necessary enhancements
& upgrades are made in this phase.

Roles and Responsibilities in the Software Development Life Cycle

(SDLC)

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Concerning SDLC, it would be appropriate to briefly remind you that we

at Django Stars prefer to use the Scrum methodology, which involves
breaking the development process into repeating intervals called sprints.
The results of the work after each sprint is a workable product (or
prototype), which becomes more and more perfect with each successive
iteration. The positive difference between the previous iteration and the
new one is called an increment. You can read more about popular
approaches and the main stages of the SDLC in the article that looks at
the Software Development Process from the Insi

The three main roles in the SDLC are:

● The PO (product owner), who is a business representative or a

voice for the stakeholders. Another name for the PO is the
requirement owner, as they make sure that development is done in
accordance with the project requirements.
● The PM (project manager), who can be considered a team
representative. The PM’s task is to coordinate the work of the
participants and organize meetings and negotiations.
● The TL (team lead), who focuses on technical implementation
and advises on how to translate initial ideas into technical
solutions. They also monitor the architectural logic of the product
and solve other technical issues.
How the Lead Roles Interact During Development
Let’s take a look at the “ideal” scenario of interactions among these
roles. At Django Stars, we usually strive to adhere to them.

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The PO creates tasks, prescribes requirements, and sets priorities.

After the team discusses the tasks and evaluates them, the PM, based on
information about the team’s estimates and velocity, shows which scope
— part or all of the proposed tasks — the team can take into the sprint.
The PM draws up a Commitment letter, and after PO approval the team
is ready to start the sprint. Also, the PM organizes any necessary
meetings for all project participants. Meanwhile, the TL helps shape the
initial ideas into software solutions, builds the product’s architectural
logic, and oversees other technical tasks.

After implementing the sprint tasks, the PM prepares reports (including

reports on the tests performed). This information is passed on for review
by the PO and stakeholders such as the client’s CEO, investors, and
other persons who provide feedback and make the final go/no-go
decision (whether to release the achieved results).

Product Owner (PO)

The main responsibilities of the PO are to set the direction and prioritize.
Since he or she represents the stakeholders, the PO must clearly
communicate their interests to the development team.

PO Skills
The ideal PO has many important skills, namely:

● Expertise in the business domain;

● A strong understanding of the product, its requirements and
objectives;
● The ability to remain fully involved in the process;
● Competence in making decisions about prioritizing, accepting
work, and identifying important features;

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● The ability to communicate decisions to the main decision-maker

(if it’s not the PO themselves);
● The ability to convey information to the team (i.e., the ability to
create good User Stories);
● Knowledge of how to communicate new requirements and keep
old ones up to date;
● A vision for the future.

Object oriented architecture:

Introduction

Object Oriented Architecture is an important concept for developing the

software. It is a design paradigm based on the division of responsibilities
for an application or system into individual reusable and self-sufficient
objects. The popular approach of object-oriented design is to view a
software system as a collection of entities known as objects. Object
oriented is based on modeling real-world objects.

● Object-Oriented architecture maps the application to real world

objects for making it more understandable.

● It is easy to maintain and improves the quality of the system due to
program reuse.
● This architecture provides reusability through polymorphism and
abstraction.
● It has ability to manage the errors during execution. (Robustness)
● It has ability to extend new functionality and does not affected on the
system.
● It improves testability through encapsulation.
● Object-Oriented architecture reduces the development time and cost.

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Disadvantages of Object-Oriented Architecture

● Object-Oriented architecture has difficulty to determine all the
necessary classes and objects required for a system.
● It is difficult to complete a solution within estimated time and budget
because object-oriented architecture offers new kind of project
management.
● This methodology do not lead to successful reuse on a large scale
without an explicit reuse procedure.

Object Oriented Concepts

Object-Oriented architecture views a system as a series of cooperating

objects, instead of a set of routines or procedural instructions. It is a
significant methodology for the development of any softwa

Object
● Object is an instance of a class.
● Object is an entity that keeps together state and behaviors.
● All the instance of a class have similar properties like class definition.
● In object-oriented architecture, objects are the basic building blocks and
a real-world element which has a physical or a conceptual existence.
● Object model is a thing or an entity in the application domain.
For example, a student, a book, etc.
● Object has a set of attribute values which define a state of the object.
For example, the status attribute of library book values: 'available',
'checkout', 'on reserve', 'missing' and 'removed'. These values are used
to determine the state of a book object.
Class
● Class is a blueprint of an object.
● A class represents description of objects that share same attributes and
actions.
● It defines the characteristics of the object, such as attributes, actions or

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behaviors

Encapsulation
● Encapsulation means hiding the data of a class from the object.
● It is the process of binding the elements of an abstraction.
● It binds the data in a single unit.
● It hides the internal details of the class and implementation details of the
procedures.
● It allows the elements of the class to be accessed from outside only
through the interface provided by the class.
Polymorphism
● Polymorphism means having multiple forms.
● It allows object with different internal structure to share some external
interface and particular effective while implementing inheritance.
● For example, class draw is implemented for various graphic objects like
circle, rectangle, triangle etc. Here, draw operation is used to draw of
more than one type of graphic object.

Inheritance
● Inheritance is a technique of deriving a new class from existing one.
● It increases code reusability.
● The existing class is called as base or parent or super class and the new
class are called the derived or child or subclasses.
● Subclass inherits or derives the attributes and methods of the super
class.
● Subclass can add its own attributes and methods and can modify any of
the super class methods.
● For example, shape is a base class. Class Rectangle and Triangle are the
derived class. It is derived from the base class that is Shape class. All
the attributes and methods of the base class are accessible in a derived
class.

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Message Passing
● Sending and receiving information among objects through function
parameters is known as Message Passing.
● Object communicates through invoking methods and sending data to
them.

Association
● Association is a group of links having a common structure and behavior.
● Association illustrates the relationship between objects of one or more
classes.
● A link is defined as an instance of an association.
● The degree of association indicates the number of classes involved in a
connection.
● Association is used to show that the instances of classifiers could be
either linked to each other or combined logically or physically into
some aggregation.
Composition and Aggregation
● Aggregation is a specialized form of association among two or more
objects.
● Composition is a specialized form of aggregation in which if the parent
object is destroyed, the child object would cease to exist. Composition
is also referred to as a death relationship.
Object Modeling
2) Dynamic Modeling
3) Functional Modeling
Importance of Vendors, Consultants and End Users in developing
ERP

n organization is not able to develop an efficient ERP System alone.

They have to look for Vendors, Consultants, and End Users.
Vendors are those who develop ERP Packages. Consultants are those

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who develop different Methods and techniques to deal with the

implementation of ERP. End Users are those who use the ERP system
once it has been developed.
So from that, a question arises.
“Why Can’t Company Develop their own ERP Packages ?”
● Developing an ERP Package is a complex and time-consuming
activity that requires lots of skilled people and other resources.
● Such Specialized Computer Work is not the main business of many
companies.
● It costs too much for the companies to develop their own ERP
Package as compared to purchasing from others.
● An organization has to hire a skilled person for creating and
maintaining ERP systems which acts as an extra cost for the
Organization.
● The team which is developing ERP must have organization skills,
project management skills, team management skills, and project
management skills and also have experience in this field.

How ERP is Developed?

ERP is developed by the three Main Person’s which are:
● Vendors.
● Consultants.
● End User.

1. VENDORS :
Vendors are the people who develop ERP packages, they spent a huge
amount of time and effort in research and development to create the
package solution which flexible, easy to use, and efficient. ERP vendors
spent a large amount of money so that they become experts to develop
flexible ERP Package.
Roles of Vendors:
● The vendors should supply product and its documentation as soon as
the contract is signed.

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● Vendor is responsible to fix bugs that are found during

implementation process.
● Vendor also provides training to the company’s users and also to the
people who
● are involved in implementation process.
● Vendors take care of quality control factors while developing ERP.
● Vendors participate in all phases of an implementation in which he
gives advice, answers to all technical questions about product and
technology.
2. CONSULTANTS :
Consultants are professional people who develop the different methods
and techniques to deal with the implementation process and with the
various problems that will help during implementation. They are experts
in the field of Administration, management, and control activities.
They have experience that ensures successful implementation. The only
limitation to Consultants is that they are expensive.
Roles of Consultants:
● They have to make a plan to carry activities in the right direction
during the implementation process.
● They provide best optimum result such as reduction in cycle time,
increased response time, improved productivity to satisfaction of
customers.
● They have to make ERP implementation for an organization as their
own business.
3. END USERS :
End users are the people who use the ERP system once it has been
developed. End-users are given training as to how to use various
functions that are automated in the software.
Roles Of End Users:
● End users are the people who are doing functions that are automated
by ERP System.
● They analyze and provide suggestions where customization needs to
take place.
● They should be able to balance their loyalty to the client and project.

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● Consultant should create a knowledge base and train people so that

knowledge stays in the organization when consultants leave the
project.

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