Monday, November 17, 2008

Configuration of ERP

Configuring an ERP system is largely a matter of balancing the way you want the system to work with the way the system lets you work. Begin by deciding which modules to install, then adjust the system using configuration tables to achieve the best possible fit in working with your company’s processes.

Modules - Most systems are modular simply for the flexibility of implementing some functions but not others. Some common modules, such as finance and accounting are adopted by nearly all companies implementing enterprise systems; others however
such as human resource management are not needed by some companies and therefore not adopted. A service company for example will not likely need a module for manufacturing. Other times companies will not adopt a module because they already have their own proprietary system they believe to be superior. Generally speaking the greater number of modules selected, the greater the integration benefits, but also the increase in costs, risks and changes involved.

Configuration Tables – A configuration table enables a company to tailor a particular aspect of the system to the way it chooses to do business. For example, an organization can select the type of inventory accounting – FIFO or LIFO – it will employ or whether it wants to recognize revenue by geographical unit, product line, or distribution channel.

So what happens when the options the system allows just aren’t good enough? At this point a company has two choices, both of which are not ideal. It can re-write some of the enterprise system’s code, or it can continue to use an existing system and build interfaces between it and the new enterprise system. Both options will add time and cost to the implementation process.
Additionally they can dilute the system’s integration benefits. The more customized the system becomes the less possible seamless communication becomes between suppliers and customers.

3 comments:

Shabnam said...

hey Rajdip,

I was searching for meaning of configuration relating to erp system and reached here.

thanks buddy for giving such a wonderful explanation.

Shabnam

Hemal Shrimarkar said...

The ERP Implementationsolution inevitably requires companies and their employees to change. They may need to change how they approach certain tasks, what tools they use, how they communicate, what methods they use to communicate and so on.Thanks!!!

Hemal Shrimarkar said...

Thanks For such a nice tips on ERP Implementation...Really very useful...