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Best practices for ERP


Understanding network layers
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Statement of purpose:
Effective planning is vitally important for the successful deployment and implementation of
an ERP system. This paper attempts to address some of the best practices for Enterprise
Resource Planning (ERP) functionality; examines the role of different layers involved in the
networks (LAN) and explains why understanding of networks layers is important to develop
an effective planning strategy for overall network structure and usability.

Background and introduction:


Process improvements, cost savings and automation are some of the key factors that force
businesses to re-evaluate its processes and remain focused on clearly defined goals and
objectives. Since timeliness and accuracy of data is very important for effective planning, the
role of Enterprise Resource Planning (ERP) systems in managing business processes has
gained significant importance over the past decade.
Traditional focus on specific business areas such as manufacturing, procurement, human
resources is now shifted to a broader use throughout the company. A research study
conducted by AMR Research concludes that more than 65% of medium and large size
corporations are implementing some form of ERP whereas another 20% are evaluating the
feasibility of a potential ERP system.
With growing number of companies adopting ERPs and allocating significant portion of
their budgets to IT, systematic planning is imperative in order to stay competitive and achieve
the desired objectives. Failure to effectively plan for ERP functionality could result in a loss
of substantial funds as well as efforts. Therefore, a detailed Strengths, Weaknesses,

Opportunities and Threats (SWOT) analysis should be undertaken to determine the feasibility
of installing an ERP application.
What are some of the best practices for enterprise resource planning functionality?
Planning for ERP functionality is the strategic IT decision of corporate enterprises as it
involves significant commitment of resources on long-term basis. Therefore, a well thought
out strategy should be devised on order to achieve the desired objectives. Following are some
of the best for enterprise resource planning functionality;

Develop a thorough understanding of business processes and requirements: Involves


examining current business operations to identify the networks physical and logical
infrastructural requirements that best represents the needs of organization. Such an
assessment would greatly assist in generating feasible alternatives and ultimately in
finding out the right ERP. Understanding of business requirements facilitates in
prioritizing the alternatives and deciding on the degree of customization and automation
required. The best practice would aim to strike a fair balance between organizations
resources and needs.

Stating a defined vision and purpose: A clear statement of objectives together with a set
of attainable goals is one of the most important aspects of enterprise resource planning.
The purpose of this practice is to articulate the benefits a company expects to receive
from a proposed ERP functionality. For instance, process improvements, lower downtimes, real time processing, data analysis and decision making. Therefore, a successful
ERP is characterized by a clear vision which may be unique to each firm.

Continuous training and development: Is essentially a form of change management


strategy itself. To be most effective, training should explain how the job roles of various
employees and workers are affected as a result of changes in business processes. This
practice also deals with behavioural aspects so that employees can accept and internalize
new developments. This greatly reduces the risk of resistance to change. Empirical
studies confirm that training and development should be taken seriously and on
continuous basis i.e., should begin from project initiation phase and continue until the
project closure followed by end-user training.

Executive management commitment and support: A successful ERP initiative is very


much dependant on the top management support and buy-in. Upper level management
provides necessary high-level support and ensures goal congruence with the
organizations vision. Monitoring, support and control by corporate executives is also
important to ensure that organizational resources are productively utilized. In most of the
cases, the Chief Information Officer (CIO) usually begins an ERP project, but the support
of CEO, CFO and other executives is also crucial. Since ERP projects are big and
complex, lack of executive participation could lead towards a total failure.

Recognize the value of early planning: Upfront planning is significantly important for all
ERP decisions. One of the common pitfalls is that management often get too much
focused on the benefits of ERP that they overlook the value of early planning. Therefore,
appropriate time should be given to prepare a solid project plan which addresses a wide
range of factors such as requirements definition, key performance indicators (KPIs),
vendor specification, evaluation and selection, testing, data migration, and other
unforeseen circumstances that may occur. Early planning reduces implementation periods

and prevents costs overrunning the budgets.

How do the various network layers calculate into the planning for networks?
Two main types of network are Local area network (LAN) and Wide Area Network (WAN).
A LAN is typically composed of several computers, printers and other hardware physically
connected through cables, infrared links or wireless media. Linking devices such as hubs,
routers, bridges and switches are used to attach the network nodes and server. Two important
features of LAN are its topology (the layout of cables and devices that interconnects nodes on
the network) and protocol (the data transportation mechanism).

Essentially, a network can be viewed as having different layers performing specific network
functions. Network layers govern the sequential flow of data from source to destination host
and use some form of topology and protocol to process the data. Therefore, understanding of
network layers is a key planning aspect in determining the appropriate network infrastructure.
The OSI model provides a comprehensive frame-work for planning an effective ERP
functionality by looking at different network layers in a sequence;
Physical Layer Includes hardware components transmitting radio signals through the
network at the electrical and mechanical level. Physical layer enables hardware to send and
receive data via a carrier i.e., cables, cards etc. Examples include Ethernet, FDDI and RJ45.

Data Link Layer: Provides transmission protocol i.e., encodes and decodes the data packets
into bits. It includes two sub-layers; Media Access Control (MAC) layer and the Logical Link
Control (LLC) layer. MAC layer determines how computers access the network whereas LLC
layer manages the data flow, synchronization and handles errors/exception in the physical
layer. Examples include PPP, FDDI and IEEE 802.5 / 802.2.
Network Layer: Responsible for creating logical paths (virtual circuits) in order to transport
data from node to node. Key functions of this layer are switching, routing, forwarding,
addressing and packet sequencing. Examples include DDP, IP, and IPX
Transport Layer: Ensures the transfer of data between systems and hosts. It also performs
functions related to data and error recovery. Examples include SPX, TCP, and UDP.
Session Layer: Initiate, control and terminates the connections between applications.
Examples include NFS, BIOS and SQL.
Presentation Layer: Works as a data translation medium i.e., format and encrypts the data at
application level and decrypts to network format and vice versa. It provides the feature of
compatibility and is also called the syntax layer. Examples include ASCII, GIF, JPG, JPEG
and MIDI.
Application Layer: Facilitates end-user processes by providing application services for file
transfers and e-mail etc. Telnet, FTP and other tiered application architectures are the major
components of this layer. Examples include WWW, NFS, HTTP and FTP.
Concluding remarks:
Regardless of the network type, effective planning process should give due consideration to
both the networks physical and logical infrastructure. A number of parameters should be
evaluated before taking final decision including the design of topology, speed of data flow,

location of network components, error checking and maintenance, configuration of devices


and other disaster recovery strategies calculates into the overall planning for networks.

References:
-

Computer Science, Carl French, 5th Ed., Cengage Publishing.

ERP Systems, Daniel E O Leary, Cambridge University Press.

Information systems, A Management Perspective, Steven Alter, 3rd Ed., 1999.

Enterprise Resource Planning: Concepts and Practice, V. Kumar, PHI Learning, 2003

Shepard, Locke and Carter, Market Analytics Report: The Enterprise Resource Planning
Report, 20042009. AMR Research Report, 2005

Sharma and Godla, Critical factors affecting an ERP implementation, Information


Systems Management 16 (Summer 1999)

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