ERPs and CRMs: SAP, ORACLE, PeopleSoft, or Apache?

An enterprise resource planning (ERP) is a software tool used to manage enterprise data. ERPs are built with an integrated systems approach that establishes a common set of applications supporting business operations. An ERP system provides an enterprise database where all business transactions are entered, processed, monitored, and reported. These systems cover different corporate functional areas such as supply chain, receiving, inventory management, customer order management, production planning, shipping, accounting, and human resource management.

ERP software packages are IT-based applications that process transactions within an organization. Payroll, inventory, and sales systems are few examples of ERP modules. These tools are useful for addressing the operational data needs of a firm. ERPs are online transaction processing (OLTP) systems. Even though the description of ERP systems in various research studies seems to classify them as operational systems, there is a suggestion that the successful implementation of an ERP can help firms to gain competitive advantage.

Contrary to an ERP, Customer Relationship Management (CRM) is a strategic and action-oriented view on the relationship between the customer and a company. CRM provides methodologies, strategies, processes and technologies to support a redesign of this relationship. One of the best examples of the successful implementation of CRMs is the “1-Click ordering” customer self-service system of Amazon.com. The “1-Click ordering” customer self-service system built customers loyalty by providing many advantages such as ease of ordering, filtering capabilities that match complementary products to the customers’ past purchases, ability to maintain customers’ billing and shipping information. CRMs, by definition, help to manipulate customer information (more precisely customer knowledge) to support strategic decision making. CRMs can be classified as online analytical processing (OLAP) applications.

Examples of ERP systems include SAP, PeopleSoft, Apache OFBiz, and Oracle. In the following sections, I will briefly provide some key features and functionalities of Oracle and SAP. Oracle’s e-Business suite integrates accounting, customer relations, manufacturing, and supply chain management across the enterprise to provide a single focus toward managing the corporate enterprise. Current Oracle efforts include the introduction of business intelligence with manufacturing known as enterprise manufacturing intelligence.

The ERP business area from the Oracle e-Business Suite contains business areas that include financial management, human capital management, and project management. Financial management modules include asset lifecycle management, cash and treasury management, credit to cash, expense management (including travel), financial control and reporting, financial analytics, governance issues, procure-to-pay, and risk management. Human capital management includes advanced benefits, compensatory management, human resources, iRecruitment, learning management, payroll, performance management, self-service, time and labor, tutor, and workforce scheduling. Project management includes project portfolio analysis, daily business intelligence; project costing, project management, project collaboration, project billing, and resource management.

SAP is an integrated suite of the following modules: (a) manufacturing, (b) financial, (c) logistics, (d) distribution, (e) quality control, and (f) human resources The three layers of a SAP’s architecture are: (a) the graphical user interface (GUI), (b) the application layer, and (c) the database layer. Like the SAP R/3 release, mySAP ERP customers can extend the functionalities of the software by adding any one of the mySAP business suite solutions. These functionalities include customer relationship management, supplier relationship management, product relationship management, and supply chain management.

Experiences from best practice organizations showed that successful deployments of SAP depend on the successful management of multiple factors. Some practitioners suggested an integrative model for SAP R/3 deployment adaptable to other SAP components including mySAP ERP and SAP CRM. The key elements of this framework are: (a) business case, (b) benchmarking, (c) deployment strategy, (d) change management, project management infrastructure, business process reengineering, and the software installation. This framework included the following best practices: (a) securing management approval for the ERP implementation plan, (b) establishing the right governance model, (c) emphasizing business process transformation, (d) ensuring the project support, (e) addressing organizational needs, (f) keeping in mind the business mission, and (g) managing IT infrastructure. SAP’s CRM is available as modular building blocks that combine software, support for best practices, and services. Starting from the 1970s, SAP proposed various innovations including mainframe computing, client server architectures, and service oriented architectures through NetWeaver.

In the world of open source, Apache OFBiz provides best practices for contributors in bug reports and plain contributors. Debuggers find errors and in doing so, improve existing features from previous developers. Apache OFBiz combines enterprise resource planning and customer relationship management. Together they support applications that allow organizations the ability to interlink complex environments using standards of Java, J2EE, XML, and SOAP.

The ERP Evaluation Center assists to (a) examine how each solution addresses your management and manufacturing requirements; (b) compare systems to see if they offer the functions critical to your industry, and (c) analyze each solution's capacity to support your company's growth and operations over time.

My first advice is that ERP and CRM software standardizes a range of processes. Each implementation typically required extensive customization to reflect a company’s unique procedures and situation. Misalignment of a firm’s ERP/CRM system with its business strategy is one of the primary reasons for delayed or failed implementations.

The second advice is that effective implementation of an ERP or CRM is greatly determined by the extent to which certain key elements are comprehensively considered and fully integrated. These elements are: (a) business case, (b) benchmarking, (c) implementation strategy, (d) project management infrastructure, (e) change management, (f) business process reengineering, and (g) software installation.