Enterprise Systems for Management 2nd Edition by Luvai Motiwalla Instructor manual

       The five important components have to work together in order to create an ERP system.  These components are: hardware, software, information, processes and people.  Hardware consists of the physical equipment such as servers and peripherals.  Software is the operating system and/or database that the company or specific department uses.  Examples of software today are Windows XP or Win 7.  The information component is basically the data that is input to the system by internal or external organizational resources.  Processes consist of policies and procedures that create the ways of conducting their business.  The people of an ERP system are the end-users and IT staff.  End-users can be anyone from the employees to the suppliers of a company.
       Another interesting aspect of ERP systems covered in this chapter is how they are implemented in organization.  Just like homes and large scale buildings, ERP systems have an architecture that the implementers must follow.  Most of the time, a vendor is the one who creates the ERP architecture when an organization wishes to purchase outside the company.  The two types of architecture for an ERP System are logical and physical.  Logical architecture supports the needs of the end-users while physical architecture focuses on the efficiency of the actual ERP system.  With logical ERP architecture, one must carefully examine what will make up the layers, or tiers, in the blueprint.
       The different facets and features of an ERP system are explained throughout much of the chapter.  Vanilla and chocolate architectures are explained in terms of their strengths and weaknesses.  Package-driven (vanilla) ERP architectures are “off-the-shelf” implementations that are generally much quicker to get up and running. Chocolate architectures are customized options. Both architectures have their ups and downs.  Vanilla implementations are quicker and less expensive; yet do not fully conform to the organization’s business procedures. Chocolate architectures take more time and money to configure, and may be more difficult to upgrade; but they can result in a more ideal ERP system for the organization. 
       Implementation strategies and the product life cycle are discussed. Both sections stress the importance of taking it slow during this process.  It is important to stay on track and follow the initial implementation plan through completion without getting bogged down by minor issues or changes.  Preparing for implementation is one of the most crucial times for an organization when replacing their current system with a new ERP system.  It is important that the organization create an implementation committee in order to communicate necessary changes.  These members should be knowledgeable enough to understand and plan for the implementation process itself.  Another key decision a company must settle on is whether or not they should change their business processes to fit the ERP system.  If they decide to do so, this is known as “vanilla implementation.”  It minimally modifies the ERP system that is purchased from the chosen vendor.  This implementation committee needs to also understand the ERP life cycle and methodology during this process.  With a well-defined methodology, a company is able to take one step at a time, define objectives, and plan a budget for the ERP implementation.
       The following sections deal with vendor selection, “going live”, and post-implementation.  The chapter gives good advice about what criteria should be considered when trying to decide upon a vendor. After a vendor is chosen and testing has been completed, it is time to “go live” with the software. This section warns that this can be the riskiest stage, and also provides examples of implementation disasters.  Guidelines and tips for maintaining the system after the “go live” stage are also discussed.
Beyond the architecture and implementation process, this chapter compares the technologies of e-Business and ERP. During the 1990’s, there was speculation that e-Business and ERP would compete as technologies. However, the technologies have developed more, and now work together to provide a wider range of business support. Also, the Microsoft example presented in the middle of the chapter exemplifies the optimal outcome of a successful ERP implementation.  Microsoft utilized the ERP vendor SAP to restructure its systems which resulted in annual savings of eighteen million dollars, and a greatly improved information system with significantly decreased data redundancies.
       Towards the end of the chapter is an exploration of business process management and the people involvement during the implementation of ERP systems. Process change and people are the most important factors for success. There is advice on choosing project managers and vendors, how to deal with change management, and finally, some of the key vendors on the market. Most organizations purchase ERP systems through outside vendors such as Oracle or SAP.  Vendors need to fulfill certain criteria of a company in order to be considered.  Project management and change management help create trust among the people involved in overseeing the new ERP system, and closely monitor objectives of the implementation plan.