E-Business and ERP in One


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E-Business and ERP in One

  1. 1. E-Business and ERP in One
  2. 2. The Paradigm Shift The Internet is causing a paradigm shift, revolutionizing our As a supplier of ERP systems for mid-sized companies, the world and radically changing the ways in which we do busi- needs and challenges facing this segment of the business ness. At Navision, we believe that all companies must enter community are naturally our main focus. the brave new world of e-business – or perish. But since none of us have ever been to this new world before, we are all Good reading! explorers mapping out new territory as we move forward. This booklet presents the Navision perspective on this paradigm shift and is designed to help you understand these changes and Niels Bo Theilgaard better equip you to make the right decisions and choices as you Corporate Product Officer move forward. Executive Vice President 2
  3. 3. Contents PART ONE: The Challenge of New Technologies Why E-Business? Page 4 Lower Cost of Doing Business Page 4 Faster Time-to-Market Page 4 Better Customer Relations Page 5 The Next Wave Page 5 The Heart of the Matter Page 5 Fast Access Page 6 Moving into E-Business Page 6 Management Decision Page 6 Integration Is the Key Page 7 Supply Chain Management Page 7 PART TWO: Getting Started Selecting the Right E-Business Solution Page 8 Integration Is Vital Page 8 ERP with an E-Business Add-on Page 9 Upgrading the E-Business Solution Page 9 The Need to Personalize Page 10 The Problem of Customization Page 11 PART THREE: E-Business and ERP in One The Future-Safe E-Business Strategy Page 12 The Navision Advantage: E-Business and ERP in One Page 12 Here and Now Benefits Page 13 How it Works Page 13 Some Relevant Details Page 13 Customization and Upgrades Page 13 Certified for Microsoft Windows 2000 Page 14 Navision Axapta: E-Business and ERP in One Page 14 In Conclusion Page 14 3
  4. 4. The Challenge of New Technology During the last few years, the changes brought about by the Faster Time-to-Market Internet and the advent of stunning new technologies have All industries around the world are facing increased competi- radically transformed the ways in which we do business. This tive pressures, with shorter market windows and product life paradigm shift is driving companies not only to rethink their cycles. Bringing new products to market successfully requires organizational structures and business processes, but to speed, optimal timing and effective communication processes, examine the Enterprise Resource Planning (ERP) systems with a seamless information flow to and from the distribution which are the living core of their business operations. channel and end-customers. The ability to react quickly to changing market conditions is critical. In other words, the capability to edit and change products, pricing and configura- The ERP market faces a dramatic technology shift to tions must be fast and flexible enough to deliver and maintain Internet-based applications. a competitive edge. Think about how long it takes for most companies to bring Why E-Business? new products to market and imagine what it would mean to be Why is everybody talking about e-business? What are the most able to reduce the gap between product readiness and the important reasons for expanding a company’s business into the sales revenues generated by that new product. virtual realm of the Internet? The answer is simple – e-business potentially translates into many short- and long-term benefits: • Lower cost of doing business • Faster time-to-market • Better customer relations In short: e-business translates into competitive advantage. Lower Cost of Doing Business Many companies investing in e-business experience high return on their investments (ROI) with payback periods shorter than 12 months. These high ROIs stem from the reduced cost of con- With e-business, everyone works better and faster ducting business over the Internet. Automating administrative because they have access to better and faster tasks also results in fewer errors and less repetitive work, free- information. ing resources to focus on more value-added activities. 4
  5. 5. Better Customer Relations Customers are the business dimension that companies neglect at their own peril. E-business provides the golden opportunity to connect more closely with customers by providing them with the services they need, such as up-to-date information on orders and products around the clock. In addition, the ability to offer online information on order history, product availability, price The Heart of the Matter calculations and delivery times enables customers to make Despite all the changes in this fast-paced world of emerging immediate buying decisions. In this way, costly waiting time is new technologies, ERP systems remain at the heart of the avoided – and faster, more accurate order processing is ensured. matter. This is why ERP vendors will play a key role in future This translates into increased customer satisfaction and loyalty. developments. Quite simply, because they understand the Of course, the really brilliant opportunity that e-business business processes which are at the core of every company’s offers is the ability to customize customer relationships (CRM) operations better than anyone else. Thus, they are in a unique by offering special services to individual customers. Everyone position to use their expertise to support the development of knows it’s far more cost-efficient to keep present customers Business Community Integration. happy and increase their business than it is to bring in new customers. As the evolution proceeds, every company will discover one crucial fact: before a company can take advantage of the great The Next Wave opportunities offered by the virtual business world, the right Business Community Integration is the name given by AMR to platform must exist. The real benefits of e-business and of the next wave of the e-business revolution – and it’s already Business Community Integration will be achieved only when happening. In brief, Business Community Integration makes company business solutions are based on a company’s core the Internet a part of everyday business operations by moving ERP system. Ideally, this system should integrate seamlessly business processes online, connecting suppliers, partners and all parts of the organization from purchasing to manufacturing, customers. As this begins to happen, we see businesses on the logistics, service & support, order administration, sales & mar- cutting edge of developments fast becoming even more inte- keting, human resources and finance. grated across organizational lines. We also see the establish- ment of virtual companies and the electronic inter-linking of supply chains. To play the game, the right platform must exist. 5
  6. 6. Fast Access Management Decision ERP software at its best provides a company with fast access Entering the e-business arena is a strategic decision for execu- to high quality business information and ideally facilitates bet- tive management and not a decision for the IT department or ter decision-making based on a professional analysis of this the sales and marketing department alone. This is because information. It is vital to have a timely and correct picture of the the choices made when moving forward in e-business will be current business situation when it comes to exploiting new a determining factor in the development of company business business opportunities, opening doors to customers and sup- opportunities in the future. Thus, investments made to execute pliers, and expanding a business beyond traditional organ- the new e-business strategy should strengthen competitiveness izational boundaries. and enable the company to take advantage of market opportu- nities as the scope of the new e-business arena develops. Moving into E-Business One of the biggest strategic decisions facing large and small companies today is not if they should take the plunge into e-business but how. This transition must take many factors into account, such as: • Existing business processes (so the move does not hamper relationships with existing customers, dealers and suppliers) • The infrastructure which already exists within the company and represents major investments from the past • The competitive landscape the company operates within, The shift to e-business tends to trigger a reevaluation including the company’s position and potential strategic and redefinition of a company’s value proposition. alliances made possible by the new business environment. 6
  7. 7. Integration Is the Key Since the implications of e-business are so far-reaching, the decision to move forward should not be divorced from the rest of the company’s business processes. In other words, the suc- cessful move will not be isolated, but rather integrated into the greater whole. This is because a successful e-business solution does many things. For instance, it facilitates the promise of accurate deliveries, enables overnight order fulfillment and allows real- time, self-service information. All of these require very tightly integrated business systems. At the same time, no one wants to invest in a solution which demands maintenance of redundant Total connectivity is the end goal – to everyone, databases, applications and business logic, separate develop- everywhere. ment tools, separate software platforms and so on. Supply Chain Management E-business is also drastically changing our models of customer acquisition, procurement, pricing and customer satisfaction. With e-business, all processes such as receiving and tracking orders, purchasing, manufacturing, managing inventory and servicing customers can be optimized. When these processes are tightly integrated with a company’s full ERP system, increased efficiency will deliver the full benefits of lower costs and increased customer satisfaction. So the question facing most companies is this: Is your supply chain prepared to deal with the potential offered by e-business? Can you deliver the speed your customers will be expecting very soon? 7
  8. 8. Getting Started Selecting the Right E-Business Solution Integration Is Vital Traditional ERP systems meet traditional business needs: The risk of poor integration should not be underestimated. finance, trade, inventory, production, administration, etc. With When an ERP vendor adds e-business applications on top of e-business being widely accepted as the “next step,” most an existing ERP solution – by making “add-ons” in different ERP vendors now offer e-business solutions. These solutions directions, there is a high risk that the applications are not can be built for a specific ERP system or they can be third really integrated into the old system. As a result, the following party solutions, which are packaged together with the original may ensue: ERP system. • A high degree of maintenance becomes necessary When selecting an e-business solution, functionality is, of • Redundant data develops course, important. The solution must meet your needs. Do you • More than one development tool must be used want to serve customers, suppliers or employees via the • More than one database must be maintained Internet? Most companies start with one of these areas and • A lack of flexibility develops then plan to add more in the future. • A lack of adaptability is experienced. Developments are moving forward at such a fast pace right now that the underlying technology is equally – if not All of the above will obviously increase the overall cost of more – important than functionality. Why? operating and maintaining the system. Because it is the basic technology of the system which will Why does this happen? Typically because the new e-busi- enable companies to take advantage of what the very near ness solutions often start at the customer level, for example, future will bring. with a Web shop, or by trading and selling goods via the Since it is vitally important to understand the role of tech- Internet. This can be implemented by an “add-on” such as nology when making the decision to embark upon e-business, described above. let us take a brief look at some of the key points to consider. 8
  9. 9. ERP with an E-Business Add-on Traditional ERP System with In the scenario shown in the diagram, a separate database is an E-Business Add-on established when adding a separate e-business solution to the Application maintenance and duplicate data lead to higher cost ERP system. Since the Internet puts different requirements on of ownership. solutions running through a browser, the development tools e used to create the e-business solution are most often different Windows clients from the tools used to create the ERP system. This is where with Business logic Browser clients problems begin. Suddenly the company has a setup, which requires maintaining two separate systems, two different data- Business logic Web interface bases, using two different development environments. In the beginning this can work, but as the system increases in com- Database Database Synchronizing plexity and new versions arrive or upgrades are required, all changes must be coordinated in both databases and systems, which can be quite a challenge to say the least. The diagram shows a traditional ERP system with a number of Windows Upgrading the E-Business Solution clients connecting to the database. The term “business logic” is used to describe the rules and calculations contained within an application, which Even though upgrading any software to a new version always is often placed on the client. In this scenario, this is usually referred to as two-tier client/server architecture. introduces the risk of some problems, it will certainly create even more problems when changing to a completely different The clients are so-called "fat" clients because the business logic is placed with them. Examples of business logic include special customer system. This is why it is important to consider the upgrade discounts and trade agreements, conversion of measurements for items in stock, or best inventory locations for incoming items. options that follow with a software system, be it ERP, e-business or any other software. 9
  10. 10. When an e-business solution is added on top of the ERP sys- and transactions in different currencies with different date for- tem by the same software vendor, at least the synergy between mats and in different languages. Even though a large per- the two systems is ensured and there is only one vendor to centage of what’s on the Internet at present is in English, deal with. But when the ERP vendor has bought a third party many new users do not speak English. Add to this the fact that e-business solution and packaged it together with their own today most users are accustomed to the new software norms ERP system, there are now two different systems working of screen and menu personalization, which makes this yet together with only the vendor’s assurance that it will function another area to consider when defining Web site capabilities. smoothly. In the most extreme or problematic scenario, the The future-safe ERP system and e-business solution will ERP and e-business solutions come from two different soft- be able to cope with these changing demands. ware vendors so the company must rely on consultants or its own IT staff to integrate the two. The Need to Personalize Since the Web is a global phenomenon, internationalization is an innate requirement of e-business solutions. Thus, most companies are facing or will face diverse requests for trading Complications in Upgrading an ERP System with Add-on E-Business Solutions The diagram below shows areas of concern that apply to all of the above- a new e-business solution. With version 5, the scenario is the same: an mentioned cases. Step 1: On the left-hand side is the ERP system. It comes upgrade of the ERP system and the two existing e-business solutions, and out in version 3 with an e-business solution, e.g. a Web-shop for customers the introduction of another new e-business solution. (first column on the right hand side). Step 2: At some point, the ERP system e needs to be upgraded to version 4. Step 3: With version 4, the e-business solution probably also needs to be upgraded, and the vendor now introduces Upgrade syncronization e Customization + e Version 3 Customer Version 4 preferences + + Version 5 personalization STEP 1 STEP 2 STEP 3 10
  11. 11. The Problem of Customization There are many very sound arguments for selecting a stan- dard ERP package. However, this choice almost always implies the need for at least some customization. When look- ing at any e-business solution, the need for customization is very likely to exist in varying degrees – and most companies want their solutions to carry their own individual look. Unfortunately, not all ERP systems support customization well. So when selecting an e-business solution that is sepa- rate from the core ERP system, this problem has the potential to grow exponentially over time. Some things to consider: • Are both the ERP system and the e-business solution cus- tomizable? • What development tools are needed to customize the two applications? Are they the same or does customization require two separate sets of tools – one for the ERP system and one for the e-business solution? • Especially in cases where ERP systems and e-business solutions come from different vendors, how will future upgrades affect customizations in either system? • Can new e-business applications be added in the future? • Will adding new applications mean starting again from scratch and recoding the existing ERP business logic? 11
  12. 12. E-Business and ERP in One The Future-Safe E-Business Strategy i The bottom line is this: companies should only invest in an IT Designed for the Web system that supports their basic business model and future Navision Axapta’s three-tier architecture is the secret behind the sys- tem’s ability to integrate Web functionality into the ERP solution. strategy. Standardization, simplification of processes, adapt- ability to changes in business processes, and scalability are Windows clients Browser clients all key elements of a successful IT implementation strategy. And when it comes to e-business, built-in Web functionality should be a must. Business logic The Advantage: E-Business & ERP in One Database Navision Axapta™ provides the latest and best developments in ERP systems because it was designed for Windows and the Key Characteristics of Navision Axapta include: • Three-tier architecture Web right from the start. The secret behind the system is its • One database • One source code 3-tier architecture, which means that Web functionality is fully • One toolbox integrated into the solution. In other words, both Windows and • One application • Two interfaces: Windows and the Web Web applications have their foundation in the same business logic. As a result, with Navision Axapta, the costly and compli- cated maneuvers mentioned in the previous sections are avoided right from the start. 12
  13. 13. Here and Now Benefits can be changed on the fly – chosen by users when logging on Some of the most obvious benefits of Navision Axapta’s to the Web site. This means that users of a site will be wel- e-business and ERP in one technology include: comed in their preferred language – with full access to their • Lower costs order history whether entered via the Internet or using tradi- • Less maintenance tional means. Under the security setup, users can also verify • No redundant data and correct their information (such as address and phone num- • No redundant business logic bers) in the ERP system. This puts customers in charge of their • Easy customization own data, which improves the data quality in the ERP system • Easy to upgrade and reduces the maintenance level for the company. • Greater flexibility • Scalability How it Works MorphX™ Development Suite is the name of the Navision Axapta toolbox. With it, companies can define and set up a fully functional Web site quickly and easily. The Web client is just another way to access the system. Navision Axapta con- nects from Internet applications to the database through the business logic in the system. This means there is no need to develop the business logic over again, now or in the future. A case in point: trade agreements are typically found not as data in the database but as formulas to be calculated each time a specific form is opened. With Navision Axapta, this type of business logic from the backbone ERP system is automati- E-business and ERP in one translates into the com- cally included when developing front-end Web applications. petitive solution. In short, with Navision Axapta, there’s nothing to stop con- tinued growth. Customization and Upgrades Some Relevant Details Because of Navision Axapta’s three-tier architecture, custo- Since Navision Axapta was designed to meet the demands of mizations to the ERP solution are also reflected in the “e” part today’s business world, the system easily handles different cur- of the solution. Customizations can be made by a Navision rencies, date formats and languages. Language and currency Solution Center – or by your own IT staff. 13
  14. 14. Even customizations that might need to be treated differently provides assurances to Navision Axapta users that the system in the two client interfaces are conducted efficiently since the fully supports the Windows 2000 platform and leverages to the same set of tools is used for your ERP and e-customizations. maximum the new technologies introduced. Windows 2000 is Due to the Navision Axapta component-based architec- Microsoft’s platform for the Internet and with this the founda- ture, upgrades to new versions are performed seamlessly. tion for “The Business Internet” is laid. Traditionally, customizations have caused many problems in upgrade situations, but with Navision Axapta, the tailored Navision Axapta: E-Business & ERP in One changes are carried along in the transition. To sum it all up: the technology and features offered by Since e-business is a completely integrated part of Navision Axapta ensure your company has ERP and Navision Axapta, synchronization is not an issue in upgrades e-business fully integrated. This delivers the basic freedom of the ERP and e-business solutions. This means tremendous every company is looking for: the ability to develop, change savings in resources and time, compared to the scenarios and grow your systems as your strategic direction is clarified described earlier. and directed towards your future success. Certified for Microsoft Windows 2000 In Conclusion Navision Axapta was the first ERP solution in the world to be Without doubt, the ERP market in general is facing a dramat- certified by Microsoft for Windows 2000. Windows 2000 has ic shift to Web-based applications. But the changes we are ex- already been deemed one of the most reliable, secure and periencing at the moment are just the tip of the iceberg. easy to use operating systems ever created. The certification Market estimates indicate that Internet business between 14
  15. 15. enterprises is already about 10 times as high as the business- to-consumer trade. Some 31% of U.S. businesses are trading over the Internet and that figure is expected to rise to more than 90% during 2001. (Source: Goldman Sachs & Company.) This dramatic shift means that the underlying technology, design, and user interface of ERP systems must be adapted, changed or redeveloped to support these new ways of doing business in the marketplace. Navision Axapta is already there, leading the way. For Further Information If you’d like to know more about Navision Axapta, schedule a meeting, or see a demo, please check out our Web site: www.navision.com The paradigm shift is underway – and it is affecting everyone. 15 15
  16. 16. You Will Find Navision Here Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Navision a/s is a leading global provider of cost-effective and adaptable Iceland integrated business solutions that help companies in their quest to grow. India Italy The company has 124,500 customers worldwide, a global network of Lithuania more than 2,000 partners, and 1,130 employees in 25 countries. The Norway Poland Navision product line consists of Navision Axapta®, Navision Financials®/ Portugal Navision Attain™ and Navision XAL®. Navision a/s was created through Russia the merger of Navision Software a/s and Damgaard A/S in December 2000. Singapore Slovenia Its shares are listed on the Copenhagen Stock Exchange (CSE:NAVI). South Africa The company is headquartered in Vedbaek, Denmark. You can learn more Spain Sweden about Navision a/s on the Internet at www.navision.com. Switzerland The Netherlands USA United Kingdom Copyright © 2001 Navision a/s (NavisionDamgaard a/s), CBR No. 76 24 72 18. The trademarks referenced herein and marked with either TM or ® belong to Navision a/s (NavisionDamgaard a/s) or Navision Development a/s. Microsoft Windows 2000 is a trademark of Microsoft Corporation. The names of actual companies and products mentioned W1-AX-A3BR herein may be the trademarks of their respective owners. No part of this document may be reproduced or transmitted in any form or by any means, whole or in part without the prior written permission of Navision a/s. Information in this document is based on Navision Axapta version 2.5 and subject to change without notice. All rights are reserved. www.navision.com