Group 9a Erp Vs Bob
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GROUP – 9A Gopinath Subramaniam | Puneet Mathur Saurav Gupta | Sumesh Gopurathingal | Utsav Bhatt
ERP vs. Best-of-Breed for a Logistics Company …A Comparative Analysis
ENTERPRISE RESOURCE PLANNING (ERP)
Enterprise Resource Planning System is a system which covers all core functions of an enterprise
Software package which covers at least 2 or more systems
Instances: Supply Chain Management (Purchasing, Manufacturing & Distribution) HR system, Accounting system, Financials, Product Lifecycle Management System, Customer Relationship Management
ERP gets all functional departments to be in one integrated system – making it cross functional and enterprise wide
Example of ERP vendors are Oracle, SAP, IBM and etc
$47 million turnover company
Had been using homegrown system – for 10 years
Old system has hindered the growth of company
Try building a new integrated system but failed
Chose ERP solution by People Soft – 17 modules
Finished the whole project within 2 years – For a $2 million dollar investment
$ 47 million turnover company
Had been using homegrown system – for 10 years
Old system has hindered the growth of company
Try building a new integrated system but failed
Chose ERP solution by People Soft – 17 modules
Finished the whole project within 2 years – For a $ 2million dollar
BEST OF BREEDS (BOB)
investment
Specialized software solutions for specific purposes
Typically includes – Customer requirement processing, purchase order processing, inventory management, warehouse management and supplier management
More focused in scope and generally caters to a specific business area like supply chain, customer relationship, manufacturing, warehousing,
human
resources etc.
Usually provides additional functionality and expertise when compared to ERP
Very widely used during 1990s as compared to ERP offerings for supply chain but less popular now
Manhattan Associates, i2 Technologies, Logility etc.
Turnover - $700 million in 1996
Manual supply chain processes
Chose best-of-breed solutions for automation
Integrated 9 separate components including solutions from Manugistics Inc., Oracle Corp.
Implementation completed in more than 3 years
Cost v/s content Cost cited as most important factor for deciding upon
new business application
Inclination towards Reducing number of vendors and license issues Keep TCO calculation simple Building long term relationships
Standardization
Moving towards standards based approach Open Source implementations
SaaS
Use of SaaS as a medium for integration
Emergence of SOA
Reduces integration challenges Helps retain modularity of application development E.g. Red Prairie
$ 47 million turnover company
Had been using homegrown system – for 10 years
Old system has hindered the growth of company
Try building a new integrated system but failed
Chose ERP solution by People Soft – 17 modules
Finished the whole project within 2 years – For a $ 2million dollar
EVALUATION
investment
BOB
ERP
2 - 4 years
1 - 2 years
Flexibility
Higher
Lower
Cost
Higher
Lower
Complexity
Higher
Lower
Quality of Solution
Higher
Lower
Staff Training
Longer
Shorter
New version of BOB may pose problems
Future modules take care of compatibility issues
Length
Upgrading
“ERP system may act as a hedge against obsolescence of stand alone BOB system provider”
How integral is Supply Chain for Business success? It depends !
ERP
BOB High, Low
High, High
Low, Low
Low, High
How complex is the SCM requirement?
It depends !
BOB - 4
BOB - 5 - WMS
BOB - 6
Standardized ERP Solution
BOB - 1
BOB - 2
BOB - 3
ERP
Best Of Breeds
Positives
Integration of system - SCM, CRM, HR, Finance, Purchase etc. all in one
Reduces operating costs
Removes the risk of duplicating data, software, storage etc.
Provides pertinent information of the entire organization
Negatives
Quality of solution is lower
Customization level is limited
Underutilization of ERP system
Positives
Fit to enterprise - A best-of-breed system is more specific in scope and thus provides more accurate solutions to the problems at hand. An organization can thus purchase the best fit solution as per their requirements.
Offers better quality solutions – For organizations that experience a complex warehouse management structure, an ERP solution might be unable to meet its advanced requirements and a best-of-breed solution would be the most suitable choice to fill in the gaps.
Higher flexibility – The best-of-breed solution offers flexibility in terms of configuration and customization to suit buyer’s requirements.
Negatives
Involves higher costs – A stand alone best-of-breed supply chain solution would need to be integrated with other stand alone systems and thus involve higher costs for implementation as compared to an ERP system which comprises of several integrated sub modules.
Implementation cycle – The implementation cycle is longer for a best-ofbreed as it is more complex in design than ERP solutions.
Issues with data integration - Integrating the b-o-b system with other modules like financial, CRM etc. is a highly complex and time consuming process and is prone to errors.
Training - The best-of-breed solutions take longer time to be trained upon when compared to ERP systems.
ERP vs. Best-of-Breed for a Logistics Company …A Comparative Analysis
ENTERPRISE RESOURCE PLANNING (ERP)
Enterprise Resource Planning System is a system which covers all core functions of an enterprise
Software package which covers at least 2 or more systems
Instances: Supply Chain Management (Purchasing, Manufacturing & Distribution) HR system, Accounting system, Financials, Product Lifecycle Management System, Customer Relationship Management
ERP gets all functional departments to be in one integrated system – making it cross functional and enterprise wide
Example of ERP vendors are Oracle, SAP, IBM and etc
$47 million turnover company
Had been using homegrown system – for 10 years
Old system has hindered the growth of company
Try building a new integrated system but failed
Chose ERP solution by People Soft – 17 modules
Finished the whole project within 2 years – For a $2 million dollar investment
$ 47 million turnover company
Had been using homegrown system – for 10 years
Old system has hindered the growth of company
Try building a new integrated system but failed
Chose ERP solution by People Soft – 17 modules
Finished the whole project within 2 years – For a $ 2million dollar
BEST OF BREEDS (BOB)
investment
Specialized software solutions for specific purposes
Typically includes – Customer requirement processing, purchase order processing, inventory management, warehouse management and supplier management
More focused in scope and generally caters to a specific business area like supply chain, customer relationship, manufacturing, warehousing,
human
resources etc.
Usually provides additional functionality and expertise when compared to ERP
Very widely used during 1990s as compared to ERP offerings for supply chain but less popular now
Manhattan Associates, i2 Technologies, Logility etc.
Turnover - $700 million in 1996
Manual supply chain processes
Chose best-of-breed solutions for automation
Integrated 9 separate components including solutions from Manugistics Inc., Oracle Corp.
Implementation completed in more than 3 years
Cost v/s content Cost cited as most important factor for deciding upon
new business application
Inclination towards Reducing number of vendors and license issues Keep TCO calculation simple Building long term relationships
Standardization
Moving towards standards based approach Open Source implementations
SaaS
Use of SaaS as a medium for integration
Emergence of SOA
Reduces integration challenges Helps retain modularity of application development E.g. Red Prairie
$ 47 million turnover company
Had been using homegrown system – for 10 years
Old system has hindered the growth of company
Try building a new integrated system but failed
Chose ERP solution by People Soft – 17 modules
Finished the whole project within 2 years – For a $ 2million dollar
EVALUATION
investment
BOB
ERP
2 - 4 years
1 - 2 years
Flexibility
Higher
Lower
Cost
Higher
Lower
Complexity
Higher
Lower
Quality of Solution
Higher
Lower
Staff Training
Longer
Shorter
New version of BOB may pose problems
Future modules take care of compatibility issues
Length
Upgrading
“ERP system may act as a hedge against obsolescence of stand alone BOB system provider”
How integral is Supply Chain for Business success? It depends !
ERP
BOB High, Low
High, High
Low, Low
Low, High
How complex is the SCM requirement?
It depends !
BOB - 4
BOB - 5 - WMS
BOB - 6
Standardized ERP Solution
BOB - 1
BOB - 2
BOB - 3
ERP
Best Of Breeds
Positives
Integration of system - SCM, CRM, HR, Finance, Purchase etc. all in one
Reduces operating costs
Removes the risk of duplicating data, software, storage etc.
Provides pertinent information of the entire organization
Negatives
Quality of solution is lower
Customization level is limited
Underutilization of ERP system
Positives
Fit to enterprise - A best-of-breed system is more specific in scope and thus provides more accurate solutions to the problems at hand. An organization can thus purchase the best fit solution as per their requirements.
Offers better quality solutions – For organizations that experience a complex warehouse management structure, an ERP solution might be unable to meet its advanced requirements and a best-of-breed solution would be the most suitable choice to fill in the gaps.
Higher flexibility – The best-of-breed solution offers flexibility in terms of configuration and customization to suit buyer’s requirements.
Negatives
Involves higher costs – A stand alone best-of-breed supply chain solution would need to be integrated with other stand alone systems and thus involve higher costs for implementation as compared to an ERP system which comprises of several integrated sub modules.
Implementation cycle – The implementation cycle is longer for a best-ofbreed as it is more complex in design than ERP solutions.
Issues with data integration - Integrating the b-o-b system with other modules like financial, CRM etc. is a highly complex and time consuming process and is prone to errors.
Training - The best-of-breed solutions take longer time to be trained upon when compared to ERP systems.
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