The letters ERP denote “Enterprise Resource Planning”. ERP is a tool derived because of the development in information technology used to integrate the complete data and processes of an organization into a single system. ERP is supported by many hardware and software applications to enable the organization to achieve the intended integration. Most of the ERP systems perform using a unified database, which is used to store data about the various functional areas of the organization. From this database, information is derived from the different functions of the organization to perform further processes and getting the reports in the desired format. Originally, ERP systems were considered useful only for large industrial and manufacturing companies.
With the development of innovative information technology, presently ERP systems are used by any type of organization, irrespective of the size or nature of business they carry on. The ERP systems as they exist at present can cover several functions like human resources, supply chain management, customer relationship management, and warehouse and inventory systems. Integrating all the information and data from all the functional areas and unifying them into a single system is the central focus of any ERP system and this enables easy access to the information by any user to achieve easy workflow (TechFAQ). Consequently, considerable time and cost savings can be achieved by the organization. With an efficient ERP system installed, harmony in the work of an organization is facilitated, since the need to maintain a single system in respect of all each function or activity is eliminated. This contributes to significant improvement in the productivity in large industrial and other organizations. Implementing ERP in any organization is a complex task involving fundamental changes in the staff and work practices prevailing in the organization. Usually, ERP vendors provide consulting, customization, and support services when they offer the products for installation.
Consulting involves enabling an organization to go live with the new ERP system and the consulting is undertaken at the initial stages of the introduction of the ERP system. This involves product training, workflow, and changes in the working pattern of the individuals. Customization is the next process that involves changing the use of the ERP system by creating customized interfaces and underlying applications. Even though ERP systems are expected to serve the core functions, there is the need to make some modifications to the systems so that they become customized to meet the peculiar needs of an organization. Support systems include support and maintenance of the ERP systems, which covers the area of troubleshooting and solving any response problems while the ERP system is being used by the organization. One of the most important qualities that an organization should possess for adopting to an ERP environment is that the organization should have ownership of the project. This implies that the management should prepare all the organizational members to understand and accept the changes required in the ways of working so that the implementation could be a success all along.
One of the major advantages of ERP systems is that being an integrated system, it can make data easily accessible by different users and therefore ensures a smooth workflow. The major disadvantage with the ERP systems is that they are usually prohibitively expensive.
Some former employees of IBM introduced SAP in the year 1972 in Germany. SAP stands for “Systems Applications and Products”. Initially, SAP was introduced with the idea of providing a common corporate database to facilitate the integration of data and information at the organizational level. Currently, SAP has been extended to several applications. Even companies like IBM and Microsoft use SAP products for running some of their businesses. SAP ERP serves as a business platform, which focuses on the sustained growth of any organization by enabling the user organization to gain an insight into operational excellence and innovation.
SAP products enable companies of different sizes and all industry sectors to respond quickly to dynamic market conditions. For instance, SAP financials is a comprehensive integrated financial management solution, which provides critical insight into the various business activities. The financial and management accounting provides for efficient financial reporting on the operations of the organization, financial supply chain management monitors the cash flow of the organization efficiently, treasury applications enhance the risk management capabilities of the companies and corporate governance reduces significant administrative costs of ensuring proper compliance with regulations.
SAP is powered by the technology platform of NetWeaver. NetWeaver is the foundation for enterprise service-oriented architecture (SOA). SAP NetWeaver and SOA when combined provide an organization an opportunity to refine the business processes continuously. Applications covered by SAP work around a system of R/3 developed to have the capabilities to integrate data in the areas of financial, asset, and cost accounting, production operations and materials, human resources, and running of manufacturing plants. SAP applications are also used to deal with archived documents. The R/3 system can be run on different platforms such as Windows 2000 and the system uses the client/server model for its functioning. The system also has the latest addition of internet-enabled usability.
SAP has different product offerings to suit the customer needs and the products can perform under a comprehensive Web interface, which is known as mySAP.com. There are new products from SAP like customer relationship management and supply chain management apart from its financial accounting and inventory system modules. The greatest advantage of SAP is its integrating capability. It reduces data redundancies in data and contributes to the reduction of workforce requirements. One disadvantage associated with SAP is it is usually expensive to implement the SAP application. SAP is developing products to suit small and medium-sized business enterprises, as originally the applications were ideally suited for large industrial houses. As of the year 2007, the company had 36,200 customers spread over in 50 countries (SearchSAP).
The advantages of the SAP ERP system include the availability of real-time information about the business process within an organization and all the organizational members get the latest update of the business processes. The system provides efficient monitoring of the performance of different functional areas on a real-time basis and therefore ensures timely action to monitor the progress of large projects. Apart from providing efficiency and unification within the organization, it also facilitates long-term planning of the business growth and expansion into international markets.
Oracle has developed tools for database development in the areas of middle-tier software, and enterprise resource planning software applications. There are products developed by Oracle to cover the areas of customer relationship management and supply chain management. Oracle is one of the largest enterprise software companies having more than 32,000 customers. Oracle ERP systems are used by several organizations in various sectors including banking, financial services, health services, and high technology. Oracle claims it is the leading supplier of software for information management with its specialized and sophisticated relational database products. A relational database comprises the system of storing the data in the form of tables and columns. Oracle is made of a set of processes that can manage the way the information is stored and accessed. Most of the Fortune 1000 companies and largest websites use Oracle products because of their suitability to the applications. Oracle enables efficient performance management and business intelligence through the support of an organization’s range of strategic, financial, and operational management processes. Oracle applications enable organizations to become smart, agile, and aligned, and it provides a competitive advantage to the companies.
Oracle has introduced the world’s first support software to Structured Query Language (SQL). Programming Language (PL) SQL is one of the other programming languages like Java, C, or Pascal. PL/SQL is more sophisticated with its feature-rich character and is largely geared to developing better database applications. PL/SQL is currently recognized as the industry standard. Oracle Enterprise Manager (OEM) is the Enterprise GUI tool used to manage the database while using the Oracle applications. Oracle has also several third-party tools for accessing the database of the organization. There are different Oracle products like Oracle Financials, Oracle Assets, Oracle General Ledger, Oracle Inventory, Oracle Order Entry, Oracle Payable, and Oracle Purchasing, which are part of the Oracle ERP system.
Oracle introduced 10g as the latest version of the Oracle database in the year 2004. The Oracle application server 10g uses Java, which makes it easier to deploy web-technology applications.
High-end workstations and minicomputers are used as the server platforms for Oracle applications. “Network computers” is another specialized area where Oracle operates successfully. The company also claims that it is the first company to introduce 100 percent internet-enabled enterprise software products covering its entire product offerings. According to the information from the company, database server, enterprise business applications, and application development and decision support tools can be run with internet-enabled systems (SearchOracle).
Oracle has a simplified approach to Web applications, which makes it more flexible. With the flexibility Oracle products have it becomes easier for IT executives to personalize a Web application. iProcurement and iExpense are some of the Web-based Oracle applications which have been found to have more flexibility and easy accessibility from the employees of an organization spread across different geographical locations around the world. Another distinctive feature of Oracle is its adaptability to workflow and business event systems. In the case of Oracle applications, there is the need for lesser customization of the systems which results in faster implementation and deployment of the applications. This also reduces the total consulting costs involved while implementing Oracle ERP solutions (SearchSAP.com).
Comparison of SAP and Oracle
The main point of distinction between the two ERP systems is that the average size of SAP implementation is fairly larger than that of Oracle. Therefore, SAP customers are bound to experience more complex implementation problems than Oracle. Problem resolution is the most confusing function within an SAP atmosphere. Because the nature of SAP is more complex, there may be numerous factors, which lead to a response-time problem. This may include database problems, network problems, hardware resource problems, or SAP software problems. Therefore, any response-time problem in SAP is to be attended to by all the administrators working parallel (Burleson). Oracle applications are less complex as compared to SAP applications.
Another common complaint regarding SAP is about the difficulty associated with deriving information on which actions can be taken. While the workflow and business event systems in Oracle offer the provision of configuring the business processes in the desired ways to the companies this provision is lacking in SAP. Thus, Oracle enables the organization to send email notifications and alters to all the organizational members. SAP does not have any provision, which allows the configuration by the user and therefore is having lesser flexibility than Oracle. Moreover, reporting in an Oracle environment is much easier and because of the easy accessibility, any user with the appropriate privileges would be able to produce a report (SearchSAP.com).
Technology-wise Oracle has an advantage over SAP in that Oracle has made its applications flexible and therefore better configurability is possible. Therefore, Oracle has a middleware product, which gives the customers products that are easier to install and maintain. With Oracle’s unified data model, organizations need to maintain only one source of data. This eliminates the need to compare the data between different departments for their validity. In the case of SAP, the system requires the users to work with five different data models. There is the need to develop a data warehouse in SAP for deriving the desired information. While in the case of Oracle, the Daily Business Intelligence product the creation and maintenance of a data warehouse have been made optional depending on the needs of the users.
The implementation process in the case of Oracle is also found to be shorter and easier as compared to that of Oracle. A company can install and start using the Oracle applications within six months. Installation and use of SAP take a much longer period with more involvement of external consultants, as the implementation involves more fundamental changes in the staff and work processes of the organization. Customization is also more in the case of SAP. Oracle has also been found to be more user-friendly and less time-consuming than SAP. With less customization, the consulting costs are reduced and there is lesser utilization of internal resources. The overall ownership cost is estimated to be 48% lower in the case of Oracle as compared to SAP.
One of the superiorities of SAP is that SAP stores its security configuration in the application security level itself, whereas, Oracle Finance follows the system of storing the security configuration at the database security level. Storing security configuration at the application security level provides the opportunity to apply additional security at the database level also while configuring the database. Therefore, the SAP application has the advantage of having higher security levels than that of Oracle (SecurityProcedure).
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