Overview of different types of erp systems, architecture, and modules

Overview of Different Types of
ERP Systems, Architecture, and
Modules
Prof. Deepa Manoj

● First ERP systems came from MRP II that were developed in the 1980s. MRP II
followed stock control and means material requirement planning. The evolution
of the software defined the three types of ERP systems like MRP, MRP II, and a
modern ERP.
● Stock control software was used in the 1960s as a set of information technology
and work activities sustaining and monitoring a proper level of stock in the
warehouse. Materials requirements planning was aimed to schedule the supply
of raw materials and work operations according to the needs of production and
other requirements related to the manufacturing of the final goods.
● ERP applications followed MRP solutions which were used to coordinate
manufacturing processes from product planning to distribution.
● It is often presumed that ERP systems work best for large enterprises, however,
today, a lot of vendors want to repackage them so that they are suitable for
small and mid-size companies. Companies with sufficient in-house IT staff may
integrate multiple software products, that’s why they can implement only a part
of the ERP system according to their work needs and opportunities.
Prof. Deepa Manoj

Traditional Types of ERP Modules
Prof. Deepa Manoj

● Since ERP is a multiple modular application, it offers a lot of
useful tools that business people can use to enhance the internal
processes in their organizations.
● ERP application handles a lot of processes like distribution,
manufacturing, logistics, shipping, accounting, invoicing, and
many others.
● Since ERP systems are enterprise-wide and cross-functional,
departments across the company are able to collaborate in one
place.
Prof. Deepa Manoj

Here they are, the most popular modules:
1. Supply chain management includes all the processes related to supply, from planning
to calculating the commission.
2. Manufacturing is all about the flow of engineering, quality control, expenditure and
cost control, etc. Production planning optimizes the utilization of manufacturing
capacity, parts, components, and materials.
resources using historical production data and sales forecasting.
3. Project management helps handle billing, costing, performance.
4. Financials manages all the assets including accounts receivable and accounts payable.
The financial module is the core of many resource planning software. It can gather
financial data from various functional departments and generate valuable reports such
as balance sheets, general ledger, and quarterly financial statements.
Prof. Deepa Manoj

5. CRM module allows marketing and sales specialists to collaborate with clients in
order to improve the relations between an organization and its clients or users as well as
to understand the main problems people face when dealing with your organization.
6. Human resources module helps HR specialists manage payroll, attendance and time,
benefits, and other things related to human resources management. HR modules
maintain a complete employee database including contact information, salary details,
attendance, performance evaluation and promotion of all employees. The advanced
module is integrated with knowledge management systems to efficiently utilize the
expertise of all employees.
Prof. Deepa Manoj

Types of ERPArchitecture
Prof. Deepa Manoj

According to Scott Hirst from SAP, ERP can be divided into two categories:
● monolithic systems
● postmodern systems
which both possess a certain number of characteristics. So, monolithic applications have the
following features:
Monolithic system
● Fits to requirements
● Is developed with a single technology stack and a single vendor
● Is not flexible to changes arising in business
● An upgrade is needed to improve the system
Postmodern systems are more user-oriented and simple than their predecessors.
Prof. Deepa Manoj

Postmodern system
● Is user-centric
● Is not a single product suite
● Driven by social media, information, and clouds)
New types of ERP architecture are user-centric.
They are simple to use to any user.
Furthermore, these systems are agile which means that they are simplified, not
containing redundant tables or other complicated things which were required for
scalability in previous versions of different ERP products.
Today, an abbreviation EAS which stands for an enterprise application suite that
can be used to denote formerly built resource planning systems.
Prof. Deepa Manoj

ERP System Examples
Prof. Deepa Manoj

SAP is the largest European software enterprise and the 4th largest in the
globe, with headquarters in Walldorf, Germany It is best known for its SAP
ERP software.
It is one of 5 enterprise applications in SAP’s Business Suite. The other four
applications are:
– customer relationship management (CRM) – helps companies acquire and
retain customers, gain marketing and customer insight
– product lifecycle management (PLM) – helps manufacturers with
product-related information
– supply chain management (SCM) – helps companies with the process of
resourcing its manufacturing and service processes
– supplier relationship management (SRM) – enables companies to procure
from suppliers
Prof. Deepa Manoj

Baan was a provider of enterprise resource planning solutions that is currently
owned by Infor.
The corporation was founded by Jan Baan in 1978 in the Netherlands, with the
main objective to deliver administrative and financial consulting services. With
the development of the first ERP solution, Jan and his brother Paul entered what
was to become the ERP industry. Their company focused on the creation of
enterprise-wide applications. The company became popular in the early 1990s.
Currently, Baan products are known for their technical architecture and its 4GL
language that is still considered to be one of the most efficient and productive
among database application development platforms.
Today, Baan ERP package is still used by thousands of mid-size companies all
over the globe.
Prof. Deepa Manoj

Oracle Corporation specializes in creating and marketing enterprise software
products which are, in most cases, database management systems.
By 2007 Oracle ranked 3rd on the list of largest software companies in the
world, after IBM and Microsoft. It became larger than IBM after its acquisition
of Hyperion and BEA. The corporation has arguably become best-known due to
association with its flagship Oracle database.
The company also develops tools for database development, middle-tier
software, ERP, CRM, and SCM.
Prof. Deepa Manoj

PeopleSoft is a company that provides human resource management systems
(HRMS), customer relationship management (CRM), manufacturing, financials,
enterprise performance management, and student administration software
solutions to large corporations and government. PeopleSoft is also the name of
the company’s product suite.
PeopleSoft’s suite was initially based on a client-server architecture. The entire
software suite moved to a web-centric design called Pure Internet Architecture
(PIA).
The new format allowed all of a company’s business functions to be accessed
and run on a web browser.
One important feature of PeopleSoft’s PIA is that no code is required on the
client – there is no need for additional downloads of plugins.
Prof. Deepa Manoj

When selecting a new enterprise resource planning (ERP) system, one of the most critical
factors in your decision will be whether you choose to deploy it on-premise or in the cloud.
Cloud-based ERP systems are more common than ever before. Today, nearly every ERP
vendor offers some form of cloud deployment option, and some have ditched their on-premise
offerings altogether.
But there are still several reasons why a small or midsize business might choose a traditional
on-premise system, which, until recently, was the norm in the ERP space. Which one is right
for your organization? Well, only you can make that decision, but this rundown on the pros
and cons of each should make it easier.
By knowing the advantages and disadvantages of each type of ERP system, business owners
can determine the best fit for their SMB, allowing for a more informed allocation of resources
and a more efficient ERP workflow.
Prof. Deepa Manoj

Deployment and Pricing of
Cloud ERP vs. On-Premise ERP
Prof. Deepa Manoj

The biggest difference between these two systems is how they are deployed.
Cloud-based software is hosted on the vendor’s servers and accessed through a web
browser.
On-premise software is installed locally, on a company’s own computers and servers.
Some vendors also offer “hybrid” deployments, in which cloud software is hosted on
an organization’s private servers (more on this later).
Another key difference between cloud and on-premise solutions is how they are priced:
● While there are many exceptions to this rule, in general, cloud software is priced
under a monthly or annual subscription, with additional recurring fees for
support, training and updates.
● On-premise software is generally priced under a one-time perpetual license
fee (usually based on the size of the organization or the number of concurrent
users). There are recurring fees for support, training and updates.
Prof. Deepa Manoj

Thus, on-premise systems are generally considered a capital expenditure (one
large investment upfront). Cloud-based systems, on the other hand, are typically
considered an operating expenditure (an additional overhead cost the organization
will continue to pay).
Cloud software’s low cost of entry—especially compared to hefty upfront perpetual
license fees—has contributed to its widespread adoption. According to one recent
study, 93 percent of enterprises currently use cloud-based software or system
architecture, and use of hybrid cloud systems increased from 19 percent to 57 percent
in one year.
Over time, however, system costs tend to converge. Below is a chart showing total
costs of ownership (TCO) over 10 years for both cloud-based and on-premise
software.
Prof. Deepa Manoj

Advantages and Disadvantages of Cloud ERPs
Security is often the top concern for prospective ERP buyers. Small wonder, considering the critical
information stored in an ERP system—including company financials, corporate trade secrets,
employee information, client lists and more.
But while buyers once were wary about the security of cloud-based software, many are becoming
less skeptical today (evidenced by the adoption rates above).
Reputable cloud vendors have strict standards in place to keep data safe. To further ease concerns,
prospective buyers can seek a third-party security audit of a vendor they’re considering. This can be
especially useful if the vendor is less well-known.
Most cloud systems enable easy mobile accessibility, and many even offer native mobile apps. But
this ease of access also comes with greater security considerations, especially if employees are
accessing company files on their personal mobile devices.
Similarly, more accessibility means less customization—and cloud ERPs offer less flexibility for
businesses that seek to tailor their system to their hearts’ content. But organizations with less
specialized needs, such as general consulting firms, can get by just fine with a cloud system’s
out-of-the-box capabilities.
Cloud ERPs are therefore best suited for small and midsize businesses seeking lower upfront
costs, system stability and ease of access. Prof. Deepa Manoj

Advantages and Disadvantages of On-Premise ERPs
There are a few notable differences in the two deployment strategies.
In general, on-premise systems are much easier to modify. The ability to customize to their
specific needs and requirements is paramount for many organizations, especially in niche
industries, such as specialized manufacturers with unique processes.
On-premise ERPs put more control in the hands of the organization, up to and including the
security of its data. It’s therefore essential that a business be capable of safeguarding an
ERP’s most sensitive information—a frequent target of cyber criminals.
Mobile accessibility can pose an issue for on-premise deployments. These often require a
third-party client to communicate between a mobile device and the on-premise software. It’s
definitely not an insurmountable problem, but it can be a pain point.
On-premise ERPs are therefore best suited for larger enterprise businesses with higher
budgets; a desire to customize system operations; and the existing infrastructure to
host, maintain and protect its ERP data.
Prof. Deepa Manoj

Cloud Hosted ERP vs. Cloud Based ERP
The cloud ERP refers to a situation when licensed software is hosted within a cloud
infrastructure. The cloud ERP is very often used to describe what is called SaaS or Software
as a Service ERP. The SaaS ERP is owned and hosted by the provider and users pay for it
on an on-demand basis. The SaaS ERP is a kind of cloud computing system; however, not
all cloud ERPS will be SaaS. Although goals of this software remain quite the same
regardless of where it may be hosted, there are some key differences between the cloud
hosted ERP and cloud based ERP.
Prof. Deepa Manoj

When you have bought new server hardware it definitely does not make sense to move to the
cloud. However, when your servers are old and outdated and your ERP software needs an
update urgently that may or may not be compatible with the software of the old servers; you
should consider moving to the cloud.
So, the decision to move to the cloud to take advantage of ERP solutions is one which should
not be made in haste. You must consider many factors before you choose between
cloud-based ERP and cloud-hosted ERP.
Cloud based systems are scalable and easier to improve. This is one of the main reasons why
shifting to cloud-based or cloud-hosted ERPs is a good move. Businesses can also come up
with customized profiles; since employees belonging to different departments are using the
same suite, managers can make profiles that give them limited access in other areas. You can
also start adding more solutions to this suite as time passes by.
For instance you can start with the payroll solutions initially and then add management of
human resources or procurement solutions later on.
Prof. Deepa Manoj

What is the Difference Between Cloud-Based ERP and Cloud-Hosted ERP?
The cloud based ERP are web based and they will follow a subscription model whereby
you pay monthly fees to the vendor to make use of the software. These systems however are
not very customizable and this is one of the major drawbacks. Software gets updated
automatically regardless of your wish and you may not even be the owner of your own data.
The cloud hosted ERP is similar to the traditional ERP in many ways. You can implement
this system in your own servers and ensure that you can conduct your daily business. This is
hosted environment and you must buy the software license. But instead of installing the
software in your own infrastructure, the provider will host the software for you. So, you can
access the ERP or other business applications from any device that has Internet connectivity.
The cost of entry is higher compared to the cloud-based ERP because you must pay for the
full server licenses but the ongoing expenses of buying hardware, maintaining the IT set-up,
updating the anti-virus or firewalls, data backups etc are taken care of by the provider. You
can customize the ERP software to cater to your business needs. You can also enjoy full
control over the data your own.
Prof. Deepa Manoj

In the case of cloud hosted ERP, the provider is responsible for your uptime and
availability. This is why when you want to enjoy ERP on cloud; you should review their
Service Level Agreement carefully to find out about the uptime guarantee.
Cloud based ERP is likely to provide a better uptime which can help your business.
Moreover, cloud based ERP will have automatic upgrades; so, you do not have to worry
about the costs or the time when upgrades must be carried out. But when your software is
hosted on a cloud server, you must find out about who will perform the upgrades and
what the costs of those upgrades will be.
In cloud hosted ERP, you need to inquire about ways in which the provider will
authenticate users, how data transmitted is encrypted etc
When you need to move to the cloud is a decision that needs much thinking and
deliberation because it will differ from one business to another depending on their
particular needs.
Prof. Deepa Manoj

Cloud Computing System Architecture Diagrams
The architecture diagrams below show a progression from simple to more complex
reference architectures.
Single "All-in-one" Server
Use one of the All-in-one ServerTemplates, such as the LAMP
(Linux, Apache, MySQL, PHP) ServerTemplate to launch a
single server that contains a web server (Apache), as well as
your application (PHP) and database (MySQL). You'll find a
collection of simple All-in-one ServerTemplates in the
MultiCloud Marketplace, which are useful for new RightScale
users and basic demos.
Prof. Deepa Manoj

Single Cloud Site Architectures
In a standard three-tier website architecture, there is at least one
dedicated server in each tier of the system architecture. (Load
Balancing Server, Application Server, Database Server)
Non-Redundant 3-Tier Architecture
If you are only testing the interactivity between each tier of your
architecture, you may want to use a non-redundant system
architecture to save on costs and resources. Since it is a
non-redundant system architecture it is primarily used for basic
test and development purposes. In the example diagram below,
there are dedicated servers for each tier of the application/site. A
non-redundant architecture is not recommended for production
environments.
Prof. Deepa Manoj

Redundant 3-Tier Architecture
Any production environment that is launched in the cloud should
also have a redundant architecture for failover and recovery
purposes. Typically, you will use a Server Array for your
application tier to take advantage of autoscaling in the cloud,
however there may be some scenarios where your application is not
designed to autoscale. In such cases, you can still create a
redundant multi-tier architecture where you have redundancy at
each tier of your reference architecture. In the example below, there
are two load balancer servers, two application servers, as well as
master and slave database servers. A redundant architecture will
help protect your site/application from system downtime.
This example diagram also demonstrates the use of a striped
volume set at the database tier. If your database is large and
requires faster backups, you may consider using a set of striped
volumes for data storage.
Prof. Deepa Manoj

Multi-Datacenter Architecture
If your cloud infrastructure supports multiple datacenters (or
zones), it's recommended that you spread your system architecture
across multiple datacenters to add another layer of redundancy and
protection. Each datacenter in a cloud is designed to be an isolated
segment inside the same geographical cloud. So if a power failure
occurs in one datacenter, the other datacenters will be unaffected.
For example, within a cloud/region there may be several resource
pools called availability zones and datacenters. The benefit of using
multiple datacenters is to protect your entire site/application from
being negatively affected by some type of network/power failure,
lack of available resources, or service outtage that's specific to a
particular datacenter.
As a best practice you should always leverage multiple datacenters
in your reference architecture if they are supported by the cloud
infrastructure.
Note:Additional cloud charges may apply for data transferred
between different datacenters.
Prof. Deepa Manoj

Autoscaling Architecture
One of the key benefits of the cloud is the
ability to horizontally scale (i.e. grow or shrink
the number of running server resources) as the
demands of your application/site change over
time. With RightScale, you can use Server
Arrays to set up a particular tier of your
architecture to autoscale based on predefined
alert conditions.
Autoscaling is most commonly used for the
application tier of your cloud reference
architecture.
https://docs.rightscale.com/cm/designers_guide/cm-cloud-computing-system-architecture-diagrams.html
Prof. Deepa Manoj

Advantages of ERP:
Is It Worth Developing a New Software?
Prof. Deepa Manoj

● There are a lot of areas where the ERP system may become really helpful. For
example, a design engineering process. In this process, a good system may help you
find the best design approach or trend that will definitely affect the final product.
● There is one more example of the ERP integration where its usage is of great
importance. Accounting modules can integrate the cost, profit, and revenue data
which can be further presented in a granular way.
● How a product is manufactured is also a field of expertise of a well-developed ERP.
This is important, because it will allow the company to keep better track of their
products, and it can allow the products themselves to be produced with a higher level
of quality.
● Security is another area where the development and launch of the system can be
helpful. It can protect a company against crimes such as embezzlement or
industrial-espionage.
With a great number of benefits, a business gets from the integration of planning
systems, there are also a lot of disadvantages. Surely, the key disadvantage of is the
cost. Expensive systems are affordable only to large corporations.
Prof. Deepa Manoj

Key Benefits of ERP Implementation
Prof. Deepa Manoj

Benefit 1 – Operating costs reduction
If you want to unite all the business processes across departments into a unified
enterprise-grade system, ERP is a perfect fit. You will improve coordination
across departments and enhance the efficiency of your employees. The
immediate profit you can get from implementing a new system is the reduction of
costs like lower inventory expenses, marketing costs, production costs, and lower
desk support expenses.
Benefit 2 – Facilitation of day-to-day management
Enterprise planning software helps easily access data to make data-driven
decisions faster. It also tracks the actual costs of activities and performs
activity-based costing.
Benefit 3 – Strategic planning support
Strategy planning processes define targets, objectives, goals according to work
needs, assets, and outcomes executives want to see.
Prof. Deepa Manoj

References
● https://docs.rightscale.com/cm/designers_guide/cm-cloud-computing-system-architecture-diagrams.html
● https://diceus.com/types-of-erp-systems/#:~:text=Overview%20of%20Different%20Types%20of%20ERP%20S
ystems%2C%20Architecture%2C%20and%20Modules&text=First%20ERP%20systems%20came%20from,II
%2C%20and%20a%20modern%20ERP.
● https://www.softwareadvice.com/resources/cloud-erp-vs-on-premise/#:~:text=Cloud%20ERP%20vs.-,On%2DP
remise%20ERP,company's%20own%20computers%20and%20servers.
● https://www.cloudoye.com/blog/erp-hosted-on-cloud/cloud-hosted-erp-vs-cloud-based-erp
● https://medium.com/datadriveninvestor/top-5-key-differences-between-on-premises-erp-and-cloud-erp-solution
s-5b0836a1506e
● https://www.softwareadvice.com/resources/cloud-erp-vs-on-premise/
● https://www.oracle.com/technetwork/architect/archday-rws-2013-krishnaswamy-1966514.pdf
Prof. Deepa Manoj

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