1. ERP Marketplace and Vendors 1

2. 2 Objectives After completing this chapter, you will be able to understand:  Evolution of ERP  ERP Market  ERP Vendors  Describe the distinguishing modular characteristics of ERP software  ERP Market Scenario in Bangladesh

3. The Evolution of Information Systems Silos –Information systems configuration used until recently –Companies had unintegrated information systems that supported only the activities of individual business functional areas Current ERP systems evolved as a result of: –Advancement of hardware and software technology –Development of a vision of integrated information systems –Reengineering of companies to shift from a functional focus to a business process focus 3

4. Evolution of ERP 4

5. 1-5 Evolution of ERP 1960s: software packages with inventory control 1970s: MRP systems –Production schedule with materials management 1980s: MRPII systems –Adds financial accounting system 1980s-Early 1990: MRPII –Integrated systems for manufacturing execution Late 1990s: ERP –Integrated manufacturing with supply chain 2000s: Extended ERP –Integrated CRM and SCM with ERP

6. Evolution of ERP ERP History began with early attempts at calculating machines in the 1940’s. In the 1960s, Enterprise Resource Planning (ERP) is born in the early 1960s from a joint effort between J.I. Case, the manufacturer of tractors and other construction machinery, and partner IBM. Material Requirements Planning or MRP is the initial effort. Manufacturing software developed during the 1960s and 1970s –Evolved from simple inventory-tracking systems to material requirements planning (MRP) software 6

7. Evolution of ERP Material requirements planning (MRP) systems were developed in the 1970s which involved mainly planning the product or parts requirements according to the master production schedule. Following this route new software systems called manufacturing resources planning (MRP II) were introduced in the 1980s with an emphasis on optimizing manufacturing processes by synchronizing the materials with production requirements. MRP II included areas such as shop floor and distribution management, project management, finance, human resource and engineering.

8. Evolution of ERP ERP systems first appeared in the late 1980s and the beginning of the 1990s with the power of enterprise-wide inter-functional coordination and integration. Based on the technological foundations of MRP and MRP II, ERP systems integrate business processes including manufacturing, distribution, accounting, financial, human resource management, project management, inventory management, service and maintenance, and transportation, providing accessibility, visibility and consistency across the enterprise. 8

9. Evolution of ERP During the 1990s ERP vendors added more modules and functions as “add-ons” to the core modules giving birth to the “extended ERPs.” These ERP extensions include advanced planning and scheduling (APS), e-business solutions such as customer relationship management (CRM) and supply chain management (SCM). 9

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11. ERP Market One of the fastest growing markets in software industry. Previously ERP software was mainly used by larger companies and enterprises. The use of ERP on a smaller scale has now created a higher demand for business management software that will contribute significantly to this market growth over the next three to four years. The global ERP market size was valued at $39,340.00 million in 2019, and is projected to reach $86,303.00 million by 2027, growing at a CAGR of 9.8% from 2020 to 2027. 11

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13. ERP Vendors in the Market There are mainly two options for companies to acquire ERP System in the Market: Commercial Vendors Open Source Vendors

14. Commercial Vendors Vs. Open Source Vendors License and implementation cost is high. Lengthy process from RFP to Go Not best fit for local industry No Customization Leading to use third party Solution Development is complex Migration to new version has a different cost Flexibility and Module addition entail extra cost Commercial Vendors NO License Cost only support service charges Agile based Implementation Specifically designed for SMEs Easily and Rapidly customized Development is Quick. NO Migration Cost on new version Free of Cost Flexibility & Module addition. Open Source Vendors

15. Categorization of ERP Systems

16. Categorization of Some Renowned ERP Systems

17. www.softwareadvice.co m Source:

18. The market is still dominated by SAP. SAP have also introduced their own cloud- based offerings. Worldwide ERP Software Market share

20. Selected ERP Systems for Comparison SAP Developed by German Giant software company SAP AG and is the leader in ERP Market. It has been used over 296,000 customers in 190 countries and has the solution for all business vertical. Oracle Developed by US Giant software company Oracle Inc. and is the second market share holder in ERP Market. It has been used over 350,000 customers in 145 countries. Microsoft Dynamics Developed by US giant software Company Microsoft Corporation and is the third market share holder in ERP Market. It has over 220,000 ERP customers in countries IFS Developed by IFS AB a Swedish software company and has over 2,000 customers in 50 countries.

21. Modules SAP solutions include a number of functional modules, which support transactions to execute key business processes, such as − Financial Accounting (FI) Controlling (CO) Sales and Distribution (SD) Production Planning (PP) Materials Management (MM) Quality Management (QM) Human Capital Management (HCM) 21

22. Modules The Oracle EBS practice leverages and unifies core EBS modules that consist of a collection of Oracle HRMS. Oracle Payroll. Oracle CRM. Oracle Financials. Oracle Supply Chain Management. Oracle Order Management. Oracle Procurement. Oracle Project Portfolio Management. 22

23. Modules Microsoft Dynamics solutions include a number of functional modules. Sales. Customer Service. Field Service. Marketing. Human Resource Project Automation. Finance and Operations. Supply Chain Management. 23

24. Modules IFS (Industrial and Financial Systems) include a number of functional modules. Financials Human Resources Manufacturing Management Inventory Management Supply Chain Purchasing Management Quality Management Sales Management 24

25. Analysis of Business Benefit SAPOracleMicrosoftIFS Benefit Factor 72.2586865 Remarks SAP is the leader in terms of providing benefits for business after implementation with 72.2% clients reporting their benefits.

26. Analysis of Customer Satisfaction SA P Ora cle Micro soft IFS Executi ve Satisfac tion 77766668 Employ ee Satisfac tion 746177 Remarks SAP has the highest level of satisfactions among the executive users while IFS is the leader in Non- Executive user’s satisfaction

27. Pros and Cons of SAP Cons Pros

28. Pros and Cons of Oracle Cons Pros

29. Pros and Cons of Microsoft Dynamics Lack to provide solution for all vertical Less customization option compared to other tier I system Not yet proven to a large number of customers User Friendly UI Comparatively low Cost of Ownership to other tier I vendor Can be easily integrated with other renowned office software from Microsoft ConsPros

30. Pros and Cons of IFS ERP ConsPros

31. Trade-Off: Functionality vs Cost of Ownership Microsoft Dynamics SAP Oracle IFS Functionality High Low High Low Cost

32. Deciding on Appropriate ERP

33. Major 10 Factors Considered in ERP Implementation

34. Risk of Not Choosing Best Known ERP Systems

35. Source: Aberdeen Group, July 2007 Here we see a statistics of the cost of each percentage point of improvement gained from the deployment of ERP Infor, QAD and SAP had significantly lower costs per average percentage point of improvement & also its users achieving significantly more reductions in costs & improvements in schedules on- time deliveries

36. Anticipating Data: The Big Picture FindingsConsideration on Anticipating Data SAP is the most costly amongst the competitors Majority of SAP projects are done in the largest business entities who have larger implementation cost which is the reason to increase average cost of SAP SAP is taking the longest Implementation time Big Companies have most complex business scenarios which requires more time to analyze thus increasing the average timing of SAP Implementation Though SAP has the lowest risk factor still it is 50% The initial problems are mostly due to the adaptation to the new system but with good support and follow up SAP tend to reduce the risk below 10% after 01-02 year of use High Satisfaction for SAP among the Executive Executives of the global enterprises are capable of critical thinking and reasoning and SAP is helping them in decision making compare to other ERP system

37. Open Source ERP Odoo is an integrated suite of applications that includes modules for project management, billing, accounting, inventory management, manufacturing, and purchasing. Those modules can communicate with each other to efficiently and seamlessly exchange information. ERPNext is one of those classic open source projects; in fact, it was featured on opensource.com way back in 2014. It was designed to scratch a particular itch, in this case replacing a creaky and expensive proprietary ERP implementation. ERPNext was built for small and midsized businesses. It includes modules for accounting, managing inventory, sales, purchase, and project management.

38. Open Source ERP Dolibarr offers end-to-end management for small and midsize businesses—from keeping track of invoices, contracts, inventory, orders, and payments to managing documents and supporting electronic point-of-sale system. It's all wrapped in a fairly clean interface. Tryton's based on a EPR system called TinyERP and has been around since 2008. Over its lifetime, Tryton has grown both in popularity and flexibility. Tryton is aimed at businesses of all sizes, and has a range of modules. Those include accounting, sales, invoicing, project management, shipping, analytics, and inventory management. The system is modular, so you can install only the modules your business needs. While the system is web based, there are desktop clients for Windows and MacOS.

39. Open Source ERP Metasfresh is popular open source ERP software that keeps up with its name of keeping its code “fresh”. It is an affordable ERP solution for small and medium businesses to keep up with their business needs. The system can easily be self-hosted by users. ADempiere is a well-established open-source ERP system that is aimed at small and medium businesses. ADempiere is an Italian word that means “achieve” or “Satisfy”, clearly representing the essence of the software to offer users multidimensional features aimed to achieve greater efficiency and increased efficiency. The system comes with complete integration with SCM, as well as, CRM, making it easier for users to manage various business functions including sales, purchase, accounting, and inventory management.

40. Cloud ERP Cloud ERP is an approach to enterprise resource planning (ERP) that makes use of cloud computing platforms and services to provide a business with more flexible business process transformation. Unlike traditional ERP software, Cloud ERP relies on the cloud rather than proprietary server infrastructure to help companies share information across departments. Cloud ERP software integrates some or all of the essential functions to running a business, e.g. accounting, inventory and order management, human resources, customer relationship management (CRM), etc. - into one complete system. 40

41. Cloud ERP Due to the coronavirus disease (COVID-19) outbreak and consequent lockdowns imposed by governments of several countries, there is a rise in the adoption of remote working models and e- commerce channels. This is driving the demand for cloud-based ERP solutions to remotely manage complex systems, increase security, meet compliance standards and access data in real- time. 41

42. ERP Market in Bangladesh In Bangladesh, some large organizations are using ERP, but most of the organizations are still using manual processes or some scattered applications (e.g. excel) to maintain their transactions and business process. The situation is more vulnerable in SME sector. They are not able to maintain an ERP because of the high price and high maintenance cost. In addition with lengthy implementation, poor project management, high expectation of users, lack of IT knowledge, inaccurate system study, and scarcity of expertise creates high complexity. 42

43. ERP Market in Bangladesh Manufacturing sectors including RMG, textile, pharmaceuticals and other consumer goods industries have created sustainable demand for IT solutions like ERP, HR information system, production and financial management solution. On the other hand, service industries like telecom (second highest after financial sector within service sector), retail & wholesale, healthcare (hospitals, diagnostic centers etc.), education (University, schools and colleges), publishing/media and real state have created sizable market space for IT solution companies. 43

44. ERP Market in Bangladesh More than 150 companies have already implemented ERP in Bangladesh. As the target is to help build a Digital Bangladesh, the number of ERP implemented-companies are increasing at significant rate. Now most of the companies choose ERP for business automation as its benefit is significantly higher than cost of implementing it. A short list of Bangladeshi companies with implementing partners are Viyellatex, Meghna Group of Industries, Coopers Pvt. Limited (PWC), LG Butterfly, Uttara Motors Ltd, Bashundhara Group, Exzatech Solutions Bangladesh, Berger Paints and Madina Group. 44

45. ERP Market in Bangladesh Jibika Plexus offers customized ERP features for all kinds of firms in Bangladesh. It is a cloud-enabled software vendor that offers payroll and HR systems based on customer requirements. XERP stands for eXtreme Enterprise Resource Planning. It is chiefly designed to be cloud-native, but XERP can work with any modern browser running on nearly any networked device. Zab ERP system integrates all the business management functionality in one single interface. This local ERP solution is highly useful for garments usage. Scannability, robustness, flexibility makes this ERP solution the most desirable one for ultimate business growth.

46. ERP Market in Bangladesh Like other business management software, Erp2all is also a business management software popularly known as ERP (Enterprise resource planning) software. The main reason of selection of this name was lying in the purpose of this software which was to bring down the cost to all SME's affordability. Prism ERP: It’s core business modules & management of administrative, managerial business propositions have made them one of the best ERP software in Bangladesh. PrismERP supports practically every category of the company by its presets. There are almost 30 types of companies that are already executed successfully.

47. ERP Market in Bangladesh Desh ERP: The vendor is dominating ERP Company in Bangladesh for providing accounting and inventory management systems. It integrates all core functionalities of businesses. The features of Desh ERP are “user-friendly tools, accounting & inventory tools, buying and selling tools, manufacturing and payroll, automation phase by phase, modular structure, well customization, unlimited user licenses, financial tools, and ability to access from anywhere.” 47

48. ERP Market in Bangladesh ERP2all: Like other business management software, ERP2all is also a business management software popularly known as ERP (Enterprise resource planning) software. The name was not come in a day. It took almost a quarter of a year of idea generation to selection. The main reason of selection of this name was lying in the purpose of this software which was to bring down the cost to all SME's affordability. Thus, the name erp2all came into reality. The name itself has got a meaning as it is intended for mass with the following consideration. 48

49. Key Performance Indicators Area /ModuleKPIMEASURE Plant Maintenance /Asset Management Optimize maintenance strategies based on asset criticality, and track asset health and performance. 18% Plant Maintenance /Asset Management Productivity In organizations with field service employees with mobile access 20% Finance and ControllingHigher margin When financial systems provide insight into financial and operational performance 76% Finance and ControllingFewer finance FTEs -In transactional processes with streamlined, automated, and integrated core processes 44% Human Capital Management Employee turnover With company-wide visibility into workforce availability and gaps -32% Human Capital Management % Revenue per worker For firms who can analyze workforce data to optimize strategies +20% Material ManagementOperating costs With closed-loop sourcing and procurement software from SAP1 -70% Materials ManagementOrder compliance With suppliers and terms working through the business network2 +60%

50. Questions About ERP How much does an ERP system cost? Should every business buy an ERP package? Is ERP software inflexible? What return can a company expect from its ERP investment? How long does it take to see a return on an ERP investment? Why do some companies have more success with ERP than others? 50

51. How Much Does an ERP System Cost? Size of the ERP software –Corresponds to the size of the company it serves Need for new hardware that is capable of running complex ERP software Consultants’ and analysts’ fees Time for implementation –Causes disruption of business Training –Costs both time and money 51

52. Should Every Business Buy an ERP Package? Some of a business’s operations, and some segments of its operations, might not be a good match with the constraints of ERP Sometimes, a company is not ready for ERP ERP implementation difficulties result when management does not fully understand its current business processes and cannot make implementation decisions in a timely manner 52

53. Is ERP Software Inflexible? Many people claim that ERP systems, especially the SAP ERP system, are rigid Options for customization offered by SAP ERP –Numerous configuration options that help businesses customize the software to fit their needs –Programmers can write specific routines using Advanced Business Application Programming (ABAP) Once an ERP system is in place, trying to reconfigure it while retaining data integrity is expensive and time-consuming 53

54. What Return Can a Company Expect from Its ERP Investment? ERP eliminates redundant efforts and duplicated data; can generate savings in operations expense ERP system can help produce goods and services more quickly Company that doesn’t implement an ERP system might be forced out of business by competitors that have an ERP system Smoothly running ERP system can save a company’s personnel, suppliers, distributors, and customers much frustration 54

55. What Return Can a Company Expect from Its ERP Investment? (cont’d.) Cost savings and increased revenues occur over many years –Difficult to put an exact dollar figure to the amount accrued from the original ERP investment ERP implementations take time –Other business factors may be affecting the company’s costs and profitability –Difficult to isolate the impact of the ERP system alone ERP systems provide real-time data –Improve external customer communications 55

56. How Long Does It Take to See a Return on an ERP Investment? Return on investment (ROI): assessment of an investment project’s value –Calculated by dividing the value of the project’s benefits by the project’s cost ERP system’s ROI can be difficult to calculate Peerstone Research study –63 percent of companies that performed the calculation reported a positive ROI for ERP –Most companies felt that nonfinancial goals were the reason behind their ERP installations 56

57. Why Do Some Companies Have More Success with ERP Than Others? Usually, a bumpy rollout and low ROI are caused by people problems and misguided expectations, not computer malfunctions –Executives blindly hoping that new software will cure fundamental business problems that are not curable by any software –Executives and IT managers not taking enough time for a proper analysis during planning and implementation phase –Executives and IT managers skimping on employee education and training 57

58. Why Do Some Companies Have More Success with ERP Than Others? –Companies not placing ownership or accountability for the implementation project on the personnel who will operate the system –Unless a large project such as an ERP installation is promoted from the top down, it is doomed to fail –ERP implementation brings a tremendous amount of change for users –For many users, it takes years before they can take advantage of many of an ERP system’s capabilities –Most ERP installations do generate returns 58