ERP commonly known as Enterprise Resource Planning is a set of many interrelated and integrated applications, designed and developed for managing multiple tasks of any business entity. Normally these are developed using common technology with centralized controlling facility.
Irrespective of platform and size, any small to large ERP System has three common features and these are
Data input facility:
Also known as User Interface or Front End.These are multiple input forms using which users / stake holders enters required data to be processed for getting desired result in presentable form. In common terminology it is also known as Front End or User Interface.
Data storing facility:
Also known as Back End. This is the most important part of any small to large software application. In common terminology it is known as Database that has the facility to store input data in predefined formats and structure. For fast processing of data, they strictly follow the predefined rules and protocols. Oracle, SQL Server, IBM DB2 and Hana etc are the commonly used databases in developing ERP solutions.
Data displaying facility:
What is the use of all above exercises if there is no facility to see what user entered? Of course, of No use. So this feature came in existence to show the data entered. There are many BI tools to display this data. SAP Crystal Report, Microsoft Power Bi, IBM Cognos etc are few commonly used BI tools.
What type of data user enters?
Answer is bit complex. It is totally depends on the requirements of any business entity.
- It could be simple and less informative.
- It could have medium level of complexity with more robust and scaled set of data to analyze for taking decisions in day-to-day activities.
- It could be highly complex with high degree of accuracy to manage single large business or a group of companies having multiple business verticals to be handled and analyze at common platform.
Broad ERP Segments
Broadly ERPs can be defined in segments or categories like:
- Manufacturing ERPs
- Servicing ERPs
- Retail ERP
As name suggests, these are specifically designed and developed considering all basic needs of any small or large manufacturing entity. Technology, cost and depth covered wise may be different but more or less covers all basic requirements of Manufacturers.
As name suggests these are specifically designed and developed considering basic needs of small to large service providers like Hospitality, Education, Health sector, Communication sector etc. The basic difference here in such ERPs , these do not have Production and related functionality.
The age we are living in, is booming retail industry. This can be a franchise model, a company own chain of outlets model, online retail model or any other. In this model main focus is kept on distribution and procurement segments. Distribution network is strictly controlled for controlling any leakage or loopholes.
Type of ERP Systems
Normally these are of two types
- Conventional Client Server / Two Tier Application
- Client server architecture with Three Tier application
What is Two Tier Application?
In this form of architecture, only two application layers are available, Front End and Back End.
Here both User Interface and Business logics are merged and implemented in Front End (User Interface layer) and Database is managed at beck end layer or in Database layer.
This is simple and cost effective in managing resources but difficult to manage on change in platforms like OS. Here on change of platform, large part or may be entire front end application required to rewrite for new OS.
What is Three Tier Application?
In this form of architecture, User Interface layer again divided into two different layers, Front End and Business Logic and third remains as it is Back End.
Front End or UI layer plays a, lesser role here. Here it only has design and some validation logics to interact with User. On change of OS only this may require to change.
Application Layer as name suggests contain all business logics wrapped in discrete classes or APIs. This becomes technology independent and used to controls application’s functionality by processing logics defined to do. It gets request to perform some tasks and based on the request if required, sends query to Back end or Database layer and process data received back from Database and sends back to front end layer to for presentation / further process.
Back End Layer as name suggests is the layer where Database is installed to store application data. It has data access layer that encapsulates the persistence mechanisms of Database and exposes data to application layer in response of queries raised by Application Layer. Here Database resides at different physically location / server hence is more secure.
There are two methods to implement this third layer. Infrastructure cost highly depends on the selection of Database layer model
- On Premises
- Private Cloud
- Public Cloud
Here Servers, on which Database is installed is kept somewhere inside the entity’s physical boundaries. It requires more capital investment in the procurement and setting up environment to manage the required infrastructure like Networking, Servers, OS and Database. This is more expensive but bit flexible. Organizations, having security concern normally go for this architecture.
It also requires in-house experienced technical ream to manage it independently or may be out sourced its management to some third party.
Here database resides on private cloud and only named users can communicate with the database. No unauthorized user can interact with the servers. This is bit costly as compared to traditional on premises setup but more secure as these work on dedicated lease lines.
It requires same expertise and conventional expenses that required in On premises setup like in-house experienced technical ream to manage it independently or a third party services to manage the whole infrastructure.
This is less expensive and flexible. Here no need to invest in infrastructure and team to manage that like in on premises Infrastructure model. Now a days many cloud services providers are available who provide such services some are like AWS, IBM, Google, Microsoft, SAP etc provide it over the public Internet facility.
Organizations that opt this facility signs a contract with such third parties to host and manage their database securely and against that pays an agreed amount. It may be a fixed or a variable cost to be paid on agreed intervals. Payment model may be based on on numbers of named users / data / bandwidth consumption etc.
Here organizations save a huge infrastructure investment at their initial level during ERP implementation time instead pay on agreed contract in a long time stretch.