Intro to ERP

Introduction to ERP

Managing and automating the business processes is one of the core errands of any given enterprise. Conventionally enterprises created their own software packages to manage their automation needs and the software used to be strict to their own business functions; until the concept of standard customize-able software came into the market.

The thought was to create a software package that would cater to all kind of businesses and processes. The software should be customize-able and scale-able enough to make sure any given enterprise can pick it and tweak it based on their requirements. That thought gave birth to the ERP. Software, which is created keeping various industries in mind, in order to satisfy the business needs on a global platform, still being adaptable to support any further extensions / customization.

But before that, it is essential to understand the requirement of software to manage the business process. So what all processes are involved in an enterprise that needs automation / management? To answer this question, let’s take one enterprise as an example. The example is a small company that deals with textiles. They take cottons from a set of cotton sellers, who are their vendors. Then they make t-shirts and sell those to the distributors, who are their customers. To keep track of the money they spend on purchasing the cotton, they maintain a book, let’s name it Purchasing. Similarly, they have their machinery with which they make t-shirts, which is their asset and a set of people running them, who are their employees. Similarly, they have another book maintaining the sales and the Orders from the customer.

If we see, as they have the business to run, they will need software to automate all their books. The one that should save all the transactions, and should be able to tell the business management, how much did they spend on what, what is the net profit, how much did they pay to their employees etc. The more information they have, the better is the grip on their business, because with the detailed information, they can make budget forecasting, budget management etc with ease.

To automate the books, some company might give them a software that will be made just for their business need, which will have different modules, like Purchasing (to track the raw material cost), Inventory (to manage the entire stocks of materials), Human resource (to enable them manage their Employees and Ex-employees with automated pay checks and benefits), Order management (to manage all the orders and deliveries), and finally a General Ledger (to give them an eye on the entire financials) combined together. This one will be like a jackpot, everything together. But yes, they will have to pay a lot for it, just because it’s made just for their business need with their business rules embedded on to it.

So what’s the solution now? Let someone come up with a software package, which will be very generic in nature, however intelligent enough to be able to be customized based on any business need and business rule.

We just discussed a software product that is similar to ERP. ERP is very generic software that can be customized based on any business need. Although the design will be constant, it will still have handles, so that the enterprises can tweak it, based on their business needs. Again fail proof, as it’s tested and being used by a lot of other firms with a broad spectrum of industries. It will also be capable of Inter-communications of Modules, which solves a lot of the business logic implementation issues. Another big advantage of ERP is that, it is frangible. The enterprise can pick modules that they want, club them together and then start using it. They don't have to buy everything in an ERP. For an example, if someone does not want a Material Management module, they just wouldn’t buy it. Buy everything else and start using them. Oracle E-Business suite, PeopleSoft, SAP, Sage, MS Dynamics, JD Edwards, Baan are few big names in the ERP space today.

History of ERP

It was the early 60s where enterprises made software to handle their material management needs. Although the software inured to be highly customized, it was used to handle the Materials and Inventory of the given firm. Later in 70s they came up with something called MRP (Materials Resource Planning), this was better software that could manage the Procurement and Inventory with the logic of timeliness. Then in the 80s MRP-II came. It was just an extension of MRP with the advantage of managing shop floors and Distribution. Finally they started involving all other functionalities as well, like Finance, Order management, Human Resource etc, and then the software were named more suitably as ERP.

Oracle in ERP

Oracle has been a big name in the software industry since 1980s. Because of its robust hold on the database management and Business intelligence sector, it was one of the leading software industries that time. It started off with Oracle financials as one of its products in 1980s. It was a software product that was capable of managing the financial ledgers of a firm. That incepted the role of Oracle in ERP market. Gradually with time, it started adding different other modules to its ERP sphere. Products like Supply chain management and Human Resource Management increased its visibility and made it a big name n the ERP market.

It started introducing oracle forms and reports as tools to create and extend GUI for its products, they named it, Oracle developers 2000; very popularly known as Oracle D2K. D2K brought in a fantastic GUI and reporting capability to the ERP world, and made the Oracle ERP, one of its kinds back then. The entire package was then called Oracle E-Business Suite and came with the first release as Oracle 10i. Eventually, based on the requirements, a lot of modules and sub-modules are added to the product. Along with that, came in a lot of tools like Oracle Workflow, AME, XML Publisher. These tools increased the scalability of the entire Product. Oracle released its E-Business Suite version 11i in the mid of 1990s. It had near about 50 modules and many more sub-modules. In 2006 Oracle released Release 12, popularly termed as Oracle R12.

While the E-Business Suite track kept on challenging its own brand with wonderful new features release by release, Oracle never stopped working on the supporting tool. It released the Oracle Developer suite 6i, which was an advanced and sophisticated version of the D2K. Later Oracle Developer suite 10g and 11g came up with an amazing product embedded to it. The new addition were called Oracle Fusion Middleware and Oracle Applications framework. These two products changed the look and feel of the ERP line of Products. Finally grabbing a strong base in market, with the acquisitions of PeopleSoft, JDE and sun Microsystems, Oracle was capable of synthesizing its ERP line of products into a large-scale emblem. They called it Oracle Fusion Applications. It was released in late 2010, and still being piloted on a major set of its clients. The embellishment through innovation continues and so does the chronicle of Oracle E-Business Suite.

History of ERP

  • Oracle 10g
  • Oracle 11i
  • Oracle R12
  • Oracle Fusion apps

Rest of the Market

E-Biz holds the second largest chunk of market share in this field, followed by SAP. After the Acquisition of PeopleSoft Inc, Sun and JDE, Oracle is measured to be one of the Prime stake holders in this market. It’s considered to be the one and only package in market with 360 degrees business support. Looking at the other contenders in Market, SAP has the biggest pie. It has its own flavors to the segments it serves. Apart from Oracle and SAP, some other notable names are Bann, PeopleSoft, JDE, Microsoft Dynamics and Sage.

Introduction to HRMS

Each and every enterprise needs people to manage and run its business. People are the most basic and the most important ingredient of any business. It could be an NGO, a Bank or a Robotics laboratory, no matter where the enterprise focuses on, it must need people to run it. That is why it becomes necessary for the enterprise to store organizational data along with employee data, and use them to manage the people related to the enterprise effectively. This requirement creates the market for a system called the Human Resource Management System.

Oracle E-Biz provides a very effective and scalable way to manage the Human Resource of an enterprise. It is called Oracle human Resource Management System (a.k.a Oracle HRMS / Oracle HCM). Oracle HRMS as a whole is a combination of few Sub Modules. Each sub module supports one particular type of application / practice. The most popular modules in Oracle HRMS are:

Oracle Human Resources: Also known as Core HR. This module helps managing enterprise structures, and Organizational hierarchy, position hierarchy, supervisor hierarchy etc. This module is the backbone of all the other sub modules in HRMS, also holds true for any other module in E-Biz.

Oracle Payroll: Also known as Payroll. This one helps managing employee payroll related details; whom all to pay, how much to pay, how to pay, when to pay, etc can be managed through this module.

Oracle Advanced Benefits: Also known as OAB/ Benefits. This module accounts for any non-monetary privileges provided by the enterprise for the employee. Life Insurance, Medical claims, enrolments etc are managed through this module.

Oracle Time and Labour: Also known as OTL. This module tracks the time sheet information of the employees. Who worked for how many hours, for which project or order, overtimes etc can be managed through this module.

Oracle Learning Management: Also known as OLM, This module manages the trainings and the competencies of a given enterprise. With this one can manage employee training needs, hiring external trainers, setting up classes etc.

Oracle iRecruitment: Also known as iRec. This module is used for recruitment processes. Managing applicants, vacancies, releasing offers etc are managed through this.

Compensation Workbench: Also known as CWB. This module is used to manage and budget the bonus, stock options etc. This empowers the enterprise with the statistical analysis, external comparisons, for better decision making on Compensation.

Oracle Performance Management: Also known as Oracle Talent Management/ performance management / PMS (Performance Management System). This one deals with the appraisals, competencies, proficiencies etc. This helps us to manage the appraisal cycles as a whole.

Oracle Daily Business Intelligence for Human Resources: Also known as DBI, a very powerful reporting tool for the HR and line managers. This is capable of summarizing the employee related details, for better decision making.

Oracle Self Service HR: Also known as SSHR. Quite effectively used as an interface to all other modules in HRMS, this module is like the face of HRMS. For an example, if an employee were to go in and submit his time sheet, or check his pay check or ask for training, this module gives him the interface. This is a web based interface that can be configured and be available to the employees for their usage.