Comparative Analysis of Enterprise Systems
Background
The emergence of Enterprise systems including its enterprise system applications is a significant event in the software development industry. Many organizations and companies will affirm the various advantages that the Enterprise systems contribute to their business activities. Enterprise systems are complex, entail an investment cost in finance and time. Its benefit includes contributing to significant changes in the organization with careful planning, and successful implementation.
Enterprise systems provide most of an organization’s significant Information Technology supporting applications that enhance efficiently and effective organization operations. Presently, almost every company is making efforts to operate an Enterprise system, which will support its central business activities, and provision of interconnection of Enterprise system’s application. Prior to implanting an Enterprise system to contribute to a company’s strategic objectives, a company requires considering various critical factors that determine the success in implementing this Enterprise system. Comparison and analysis of two Enterprise Resource Planning software systems namely, SAP ECC ERP system and Microsoft Dynamic GP 10, will demonstrate functions of an Enterprise system in a company placing focus on Enterprise Resource Planning system functions in invoicing.
Software Platforms of ERP Systems
Microsoft Dynamic GP 10
Microsoft Dynamics GP 10 is the latest release of the 2010 version of Microsoft’s ERP system. This version comes with it an improvement of previous version function, and a new interface for users. The integration of these features is in the system application, and technical areas. There are over 41,000 customers across the world that uses the Microsoft Dynamics GP 10. Microsoft Dynamic GP 10 provides additional operational functions in a business like basic financial through offering full ERP system solution (Duncan & Liley, 2011). Microsoft Dynamic GP 10 provides enables ERP system functionalities in financial accounting, management, service information, sales and marketing, human resources, and supply chain. Microsoft Dynamic GP 10 further enables a firm to enjoy business-reporting activities like invoicing (Microsoft, 2011).
There are four different versions that comprise a Microsoft Dynamic GP 10 ERP system. These four system versions include SL, GP, AX, and NAV. The SL Dynamics provides basic accounting and project management in different divisions of an organization (Duncan & Liley, 2011). SL Dynamics primarily aims at the different construction companies, contractors serving the government, distribution companies among others. The GP design of this Dynamic is for global companies or firms, manufacturing companies, and various global industries. This Dynamic provides firms Microsoft GP functions, an, additional company intelligence reporting, and business environmental sustainability information. The AX Dynamic is a Cadillac program of Microsoft Dynamic GP 10 that offers large companies complete solutions to ERP problems. The NAV Microsoft Dynamic is an ERP system suite for small size business firms. This Microsoft Dynamic involves additional functions apart from enabling functions like accounting or basic PM, which the SL Microsoft Dynamic provides. The NAV Dynamic provides an efficient solution that is cost effective for firms in need of ERP systems solutions (Microsoft, 2011).
SAP ECC ERP
Software vendors can choose suitable Enterprise Resource Planning systems depending on the needs and size of their companies. Large investment ERP systems include SAP, Microsoft, and Oracle. Midmarket ERP system comprises Sage, Lawson, Infor, IFS, and QAD. Small-scale business can choose ERP systems like CDC, Consona, or NetSuite. SAP ECC ERP is among the Enterprise software that a person can purchase to meet his individual needs or a company’s technical capacities. SAP ERP systems focus on one business area process like marketing or product development. Common modules of ERP comprise inventory control, marketing, human resource management, invoicing, purchasing of material, distribution, planning of products, and distribution (Sedgley & Jackiw, 2001).
The main aim of implementing a SAP ECCE RP system in a business area, is to offer a central repository for information, that all the different ERP facets in the system can share. This enables a business to smoothen data flow in the company. With the rising popularity of ERP methodology, ERP software application continues to assist managers of various companies in different business area conduct implement SAP ERP system in their business activities. Business managers have the ability of incorporating SAP ECC ERP in business management by presenting them as one unified package (Sedgley & Jackiw, 2001).
Invoicing
Businesses possess various different needs in financial accounting that differ from one company to another. This variation includes large volumes of inventory data and customers. Companies require an invoice to track sales payments, or manage the contacts information of their customers. An invoice is a document that a firm, company or organization issues or receives, which requests payment for the supply of goods or services. Issuing this document requires the receiver of it to settle their debt with the supplier with reference to the terms in the purchase agreement.
Invoicing entails providing standard information that includes the word “invoice”, reference number, invoice date, registration information of a company or business, name of the buyer and contacts, details of goods or service including date of delivery, number of purchase order, price if necessary, and terms of payment that includes payment method.
A company or business requires having a good invoicing policy as an administrative task. This ensures a good flow of cash in the business. Customers appreciate when they are aware of a company’s terms of invoicing. Depending on the size, a business should track the status of the invoice that it issues on a daily, weekly, or monthly basis.
Capacity of ERP Systems to Support Invoicing
Table 1: ERP Systems Comparison
Area SAP ECC ERP Microsoft Dynamic GP 10
Interface Require training of end-users in the business. System’s end-users do not require training. System application is like a Windows interface.
Functionalities With the correct system module, functions are methodical. A user can systematically create invoicing functions of a business. Majority of information is in the first window.
Reporting Use spreadsheet like excel to report various file. Does not need any intermediary system to report. It is possible to export report directly to Microsoft office files.
Operation process Handles information one piece at a time. Handles large volume of information at the same time.
Entering of item cost information Enables a user to go through all information before entering details. A user has to mark to see the cost information to enter on an invoice.
Information description Description of information is in Infotypes. Windows enable a user to view all information in an invoice. An open screen displays all necessary information.
Technology Offers effective integration of system application Microsoft Dynamics is not core processes or following fixed patterns.
Size of business Ideal for large companies in need for ERP systems for invoicing application. Ideal for small businesses in need for ERP systems for invoicing application.
Flexibility Less flexible. Flexible
Employee satisfaction Offers a high employee satisfaction. Hard to satisfy employees using the system.
Implementation Require a lot of time, entails high costs, and risks. Requires less implementation time, predictable costs, but has high risks.
Internalization Has a good internalization support Internalization support is less.
Analysis
Comparison of the two systems shows numerous differences between SAP ECC ERP system and Microsoft Dynamics GP 10 in an invoicing business area. Operation of SAP ECC ERP system requires a business to train its employees about its application and how they can support its invoicing function. Microsoft Dynamics enables a company to install it, and its employees use the system with no need of training because it is similar to Microsoft office (Arens & Ward, 2008). Entering of items details using SAP requires a user to go through windows methodically to view cost of the item to enter in an invoice. This is an advantage of using the system because a user can enter a lot of information for invoicing records. SAP ERP gives a user the option of skipping a window when entering data saving a lot of time (Lau, 2005). Using Microsoft Dynamic GP 10 enables a user to view all the information on the screen. Invoice reporting in SAP ECC ERP system requires the user to use spreadsheets like excel to create various report files in invoicing. Microsoft Dynamics GP 10 has provision for a user to export report directly to Microsoft office word without the need for any intermediary system to assist in reporting. This is advantageous because it saves time to export information by directly reporting in Microsoft word (Arens & Ward, 2008).
In supporting the business environment in invoicing, SAP ERP system integrates various system application, and software because of new technology in invoicing. This offers innovative solutions for invoicing functions of a business (Wieder, 2009). SAP ECC ERP is effective for large companies, whereas Microsoft Dynamic GP 10 is ideal for small businesses because it provides an option of implementing the system on a low cost. Flexibility of SAP allows following of core business processes throughout the enterprise. SAP can accommodate complex business systems with numerous customizations. This option makes it difficult to enforce methodologies for a business (Lau, 2005). Microsoft Dynamic GP 10 offers generic solutions in business customization challenges. Employee satisfaction is high using this system than SAP ERP because understanding of Microsoft Dynamic GP 10 application is easy. Implementation of SAP ECC ERP system takes a lot of time than Microsoft Dynamic GP 10. The risk in using SAP ECC ERP is high in than Microsoft Dynamic. SAP ERP cost of implementation high because it requires training of end-users (Arens & Ward, 2008). This system is similar to Microsoft applications that are easy to use. Implementation of SAP ECC ERP enhances internalization of business requirements and scalability. Microsoft Dynamics support for business internalization is less than SAP ECC ERP systems (Yudin, 2010).
Factors Managers Should Consider When Choosing an ERP System
There are various factors that managers require to consider prior to choosing an ERP system to implement. These critical factors are significant throughout the levels, which include tactical, strategic, and operation of an ERP system project. These factors include business case, management commitment, change management, project management, training system, and communication process.
Management Commitment
Studies consider this as the most crucial and significant factor for consideration prior to choosing an ERP system to implement (Kapp, Latham & Ford-Latham, 2001). A company should ensure that it is willing and has the capacity to provide the necessary ERP resources during the implementation of an ERP system. A business capacity to commit itself managing a system will enable the acceptance of the ERP system by employees in the company and customers who will use some of its application. The factor of management commitment not only focuses during the selection stage, but further to commitment in implementation of an ERP system version with reference to business size and needs.
Business Case
A company should consider its business objective, benefits, and needs when choosing an ERP system to implement in its core functions. Business case helps to decide a system that will contribute to change that a business needs. Considering the business case, enables managers of a company to decide on a system that will focus its functionalities on the company’s expectations it requires from ERP system implementation. Considering the duration that the company wishes to take in making decisions using ERP system is necessary prior to selecting an ERP system to achieve that need (Kapp, Latham & Ford-Latham, 2001).
Project management
Managing any ERP system is costly, challenging, and involves taking risks. The choice of ERP system that a business selects should be one that a company has the capacity to manage as a project. Consideration in ERP system selection should take into account the various project management aspects like information system acquisition, planning, selection of management personnel, and monitoring and evaluation of the ERP system. ERP system project management factor involves consideration of implementing a system within a company’s financial budget and time during implementation (Kapp, Latham & Ford-Latham, 2001).
Change Management
Change management consideration involves how a company will integrate an ERP system, applications, and processes during the shift to implement ERP systems. Many companies fail to implement ERP systems by not considering issues like business process. In these cases, managers underestimate crucial factors in change management, which provides a tool to integrate external and internal change motivations like impacts from advancing technology (Kapp, Latham & Ford-Latham, 2001).
An ERP system has significant business challenges that affect the staff most. Change management consideration is necessary when selecting an ERP system for a company, and its implementation. Change management factor consideration should identify the categories of changes that a business wants to achieve (Kapp, Latham & Ford-Latham, 2001). These categories are changes that a business anticipates, changes that are emergent, and changes that are from opportunities in a business area.
Training
Any choice of an ERP system requires advance training in its management. Installing any ERP system without sufficient training of the end-users can cause significant consequences. A business should consider the training level requirement of an ERP system before selecting one that meets its business objectives. Implementing ERP systems with inadequate training is a significant reason why many businesses fail to make ERP systems support their business activities (Kapp, Latham & Ford-Latham, 2001).
Considering the training factor enables a business, identify ERP system’s aspects. Prior to selecting any system, consideration is crucial for an appropriate end-user training plan. Consideration will identify the cost that a system will involve training those who will use it.
Communication
Communication factor covers how an ERP system will contribute to supporting a business by providing significant data and network for all the factors during the choice and implementation of an ERP system (Kapp, Latham & Ford-Latham, 2001).
Conclusion
ERP systems provide business solution by integrating and quoting through invoicing application in SAP ECC ERP and Microsoft Dynamic GP 10 for various invoicing functions. These enterprise systems for both large and small business assist a company or business in saving on costs, resources, and time during system implementation. Both Sap ECC ERP and Microsoft Dynamic GP 10 ERP systems show that a business can benefit from their provision of tolerance for risks, technical maturity, value in costs, and scalability in a business (Kapp, Latham & Ford-Latham, 2001).
Reference
Arens, A. A., & Ward, D. D. (2008). Computerized accounting using Microsoft Dynamics GP 10.0. Okemos, Mich: Armond Dalton Publishers.
Duncan, D., & Liley, C. (2011). Microsoft Dynamics GP 2010 reporting: Create and manage business reports with Dynamics GP. Birmingham, UK: Packt Pub.
Kapp, K. M., Latham, W. F., & Ford-Latham, H. N. (2001). Integrated learning for ERP success: A learning requirements planning approach. Boca Raton: St. Lucie Press.
Lau, L. K. (2005). Managing business with SAP: Planning, implementation and evaluation. Hershey, PA: Idea Group Pub.
Microsoft (2011). Human resources management in Microsoft Dynamics GP. Retrieved on 30th November, 2012.
from <http://www.microsoft.com/en-us/dynamics/products/gp-hr-management.aspx>
Sedgley, D. J., & Jackiw, C. F. (2001). The 123s of ABC in SAP: Using SAP R/3 to support activity-based costing. New York: Wiley.
Wieder, B. (2009). Business process integration with SAP ERP. Bondi, N.S.W: Auxilia.
Yudin, V. (2010). Microsoft Dynamics Gp 2010 Implementation. Birmingham, UK: Packt Pub.
