Cost Effective and Flexible Shared ERP solution for SME Segment (Part 2)
Guest post by
Ajay Ashok Verekar, Senior Consultant, Infosys
In part-1, we discussed about importance of small and medium enterprises in global market and challenges faced by SME for ERP implementation.
What IT companies can offer -
I think proposed solution will empower SME to go for good ERP system like Oracle or any other ERP solution. Our solution can be accessible to small scale to large scale enterprises.
As a part of solution, IT companies can provide Oracle application or ERP system on Open network or on Internet to every customer. This is like shared ERP system across customers. Companies can make the most of Cloud computing technologies to get more benefits of technologies and cut operating cost.
- Implementation - System Implementer (SI) can do template implementation. Template means Implementer will do standard Oracle application/ERP implementation without any customisation or any changes in standard oracle functional flow. Based on my past ERP implementation, we had done 2/3 sites vanilla implementation and I found systems are running smooth and fulfilling customer requirements. Hence SI will give customer basic functionality by implementing basic modules without any customisation which will fulfil customer basic daily transaction and reporting requirement like MFG transaction, P2P, O2C and accounting transaction in system. Customer will do Modules or Process selection based on requirement with help of SI.
- Organisation structure- SI will create different organisation structure on one instance for each customer. Organisation structure level will be decided by customer. e.g. Some client won't require Full Oracle application structure from Business Group to Inventory -locator. So in this case based on requirement SI will just create structure from Operating Unit to Locator. Above operating unit level structure will be kept common for certain customers.
- Data Migration - Standard template will be provided to customer for data migration. Using template, SI will collect minimum information from customer and will apply standard remaining information based on oracle flow.
- Training - User will be given training for daily transaction data entry based on standard flow and not about any Set up and other functional or technical training. User will do only data entry with respect to his daily transaction. Tool like UPK or video recording will be used to share training details.
- Business flow mapping- As per my experience, Normal business can be mapped in Standard Oracle/ERP flow without any customisation. Any business need to track MFG transaction, Supply chain transaction, stock keeping and respective accounting etc. which can be managed using standard Oracle/ERP flow. SI will implement standard Oracle/ERP process across all customers.
- Reporting - Standard customised reports will be developed to pass on transaction and stock information to customer. These report Outputs will be developed in EXCEL so that customer can play with information and develop reports as per their or statutory requirement. Accounting information will be passed to customer in excel report format if customer organisation structure is developed up to Operating unit level only.
- Support- IT companies will develop common support team to all customers hence support will be like shared service. This team will work in shift to provide 24*7 supports. This team will have resources across Oracle application business flow and DBA activities.
Features of Solution-
- License cost - License cost will be shared across customer. E.g. Manufacturing Module cost in Oracle/ERP System is approx 4594 $ / Year for Min 10 Users. So if Small scale organisation is going for 2 users each then this cost will be shared by 5 organisations. SI will pass on these benefits to customer. However for this benefit IT Company needs to discuss with ERP vendor for license agreement.
- Hardware and software cost- This cost will be also going to be shared across multiple customers. Also cloud computing will reduce some cost of vendor as well. Compare to In-house system, Cloud computing will reduce significant amount of Hardware and software cost of SME.
- Implementation project cost- Implementation cost will be very less and its standard flow implementation. There won't be requirement of big project team from customer side or from System Implementer side. System will be like plug and play.
- Support- Support will be managed by System Implementer. This will be like BPO business /shared support service. So cost of support will be shared across customer. Client doesn't need to maintain their own IT staff or business team to maintain any ERP system. Business will do only daily transaction data entry, support will be provided by SI.
- Software Maintenance - Software Maintenance will be done by SI and this cost will be also shared across customer.
- Training - Training cost will be also reduced for both customer and SI as UPK or video recording will be used by both.
- Flexibility- Customer will have better flexibility to tune up with software and move out of software in worst scenario. If customer wants to switch to their own ERP system instead of shared, this is possible with ease based on available data on shared instance.
- Organisational fitment- Oracle system will give better fitment as erp package for business transformation and changes in environment or process compared to small or customised ERP system. Customer will get more flexibility during business development and customer will able to accommodate business growth in ERP system.
- Overall with less cost and risk, customer can go for good ERP system.
- Alongside all above points, System will help to reduce Carbon footprint globally due to use of shared resources.
- High end customisation- High end customisation won't be available in system.
- Data Security- Data security will be concern for Customers. System Integrator Partners can maintain data security clause and data should not be shared across customer without permission.
Also customer can refer data information in their preferred coding so that it won't be understood easily to anyone.
- Open network- Open network need more securities from Virus or any criminal sources. This may add some cost burden on customer. But this burden will be there in normal practice as well for any ERP implementation.
In Part 3, I will cover benefits to system implementer or IT companies from this solution.
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