Comparative Analysis between SAP System and Microsoft Dynamics System - Literature review Example

? Comparative analysis between SAP system and Microsoft Dynamics system Contents Introduction 2 Microsoft Dynamics GP 3 SAP Business One 3 Supply Chain Management 4 SAP, Supply Chain Management 5 Microsoft Dynamics, Supply Chain Management 6 Factors managers should consider when choosing an ERP system 8 Costs 8 Nature of the business 8 Technology 8 Comparison 9 Table 1: General Comparison of Systems 9 Table 2: Creation of suppliers 10 Table 3: Creating Divisions 10 Table 4: Creation of departments 11 Table 5: Assigning a contract to supplier 11 Interpretation 12 Conclusion 12 References 14 Introduction This comparison will involve analysis of the following ERP systems: Microsoft Dynamics and SAP Business One Microsoft Dynamics GP The latest version of Microsoft Dynamics GP is the version 12 that was released in 2013. It uses Microsoft SQL server 2008 and it is written in language called Dexterity. It is one of the four accounting packages that trade on the Microsoft Dynamics brand. Others include NAV, SL, and AX. Dynamics NAV is designed in a way to suite mid-size companies. It is an ERP that incorporates both basic PM and accounting functions that are offered by other types like SL. Dynamics SL is best suited for managing projects and other accounting roles across many divisions in a firm. It was made to target construction management firms, distributors and any other contractor. Dynamics GP which will be our focus of discussion in this analysis is used mainly in the Americas, UK and Ireland, the Middle East, Australia and New Zealand. It was one of the first accounting packages released in the USA and was meant to run on Windows 32 bit machines. It was designed to be used in financial management, supply chain management, human resource management, project management and manufacturing. Dynamics AX was designed for global corporations and modern manufacturing firms. It offers all the functionalities of GP and also provides advanced business reporting and intelligence. SAP Business One This is an ERP that is used by all type of businesses i.e. small, medium and even in large companies. It is applied in business functions ranging from customer relationship management, purchasing and supplies, financial management and business analytics. It also provides comprehensive business intelligence and reporting. In 2011, SAP introduced a solution that was meant to consolidate business and enable intercompany integration. This was to enable multinationals to manage transactions and activities across multiple databases. The functions of the SAP ERP system can be broadly categorized into four broad modules i.e. Financial, Human Capital Management, Operations and Corporate Services. In financial management, it supports for multiples currencies, bank reconciliation and budgeting. In human capital management, it is applied in functions of managing the payroll, recruitment, human resources, learning and development and analysis of work functions. In operations, it provides functions like purchasing, manufacturing and research and development. In corporate services, it helps in asset management in areas ranging from real estate, travel management and project management. The business area chosen for comparison in this paper is supply chain management functions with respects to each ERP package. Supply Chain Management When we discuss about supply chain management, the discussion is based on two main core ideas; Every product that reaches the customers will represent a collective effort of many corporate organizations and this firms will be collectively referred collectively as a supply chain Unfortunately most businesses have only focused what happens within their premises in as much supply chains have existed for a long time. Therefore few business have understood the entire chain of activities that leads to the ultimate delivery of the final products to the customer Therefore supply chain management can be referred to the management of all the supply chain activities in order to improve customer value and service and gain competitive advantage. The supply chain activities will range from product development, sourcing, production and all the logistics involved. All the firms involved in the supply chain are linked through both physical and information flows. Physical flows will involve the visible part of the supply chain i.e. transformation, movement and storage of goods and materials. Information flow enables various partners in the supply chain to coordinate their plans and to also control the day-to-day flow of goods and materials across the supply chain. The five basic components of a supply chain management will involve; Planning- A strategy planning all the resources the firm needs to meets its services Product sourcing- identifying and choosing the supplier the goods and services they need to create their product Manufacturing- this involves scheduling activities that will be necessary for production, testing, packaging and delivery of the product to the customer Delivery- this will involve all the logistics that needs to be put in place i.e. from the receipt of orders from customers to establishment of warehouses and arrangement of delivery of the product to the customer Return- this involves establishing a system for receiving excess or defective products back from the customer and also providing customer support. Therefore a Supply Chain Management ERP should be able to help organizations achieve all these discussed above with ease of use. SAP, Supply Chain Management The SAP Business One provides many different capabilities for the Supply Chain Management departments to use in performing their tasks. Irrespective of the size of the business, SAP supply chain management (SCM) solutions help to build resiliency and flexibility into the firms supply network. Some of these solutions will include this among others: S&OP - Integrated Sales and Operations Planning This synchronizes supply and demand planning in line with the business goals. It also helps to drive faster, accurate sales and operations planning by integrating the enterprise data and the reporting process. It also helps to integrate the supply network planning to the purchasing distribution Manufacturing and supply planning This helps boost the supply chain profitability giving the managers greater control over the supply and demand, better supplier relationships and a real-time visibility in the production process. It therefore helps create a collaborative relationship among suppliers, manufactures and the customers Demand Management Gives a better forecast on demand and helps achieve the optimum demand to supply ratio. Also ensures accurate prediction of customer reactions to pricing and service delivery. Collaborative Response Management It ensures improved communication with the customers, suppliers and contractors hence increasing the speed of service delivery and adaptability to the chain network. It also helps decrease costs associated with procurement, inventory and sales. Track and Trace Helps improve ease tracing of raw materials and products across the network. Also detects counterfeits and diversions by close monitoring the flow of genuine goods. Supports ease ways of tracing raw materials, supplier and customers. Microsoft Dynamics, Supply Chain Management Microsoft Dynamics provided an extensible, familiar supply chain management (SCM) software that helps reduce barriers to productivity and efficiency and also help organizations deliver their goods and services in accordance to customers need. Microsoft Dynamics GP 2013 provides the following solutions in Supply Chain Management: Demand Planner It combines forecasting and planning functions with a user friendly interface that helps plan for future demands and gains. It also helps the understanding into customer buying patterns. Advanced Distribution This tool is intended for streamlining of the distribution cycle and enables rapid access to accurate information in order to reduce input errors and automation of information-sharing across the chain network. Inventory Management It provides well detailed inventory information from a central location. Also provides ease to use stock analysis tools, efficient reporting capabilities, picking and tracking the enables the business to meet customer demands. It is also able to link well with other GP modules. Purchase Order Processing It enables entry of purchase transactions in the supply cycle hence helping in costs management and improved efficiency. It provides options for printing or e-mailing the purchasing order documents. Other important features include VAT tracking, Auto-Receive, Auto-Invoice and ability to handle variance prices and quantities. Sales Order Processing It helps manage the whole sales process i.e. from quote to order to invoicing. It enables entry of quotes, orders, invoices and returns from one central location hence improving efficiency. It also has a customer priority ranking feature that identifies top customers and distinguishes different types of customers. It provides a seamless integration with other SCM solutions. Factors managers should consider when choosing an ERP system Costs These costs to be considered will include implementation cost, customization costs and maintenance costs. The implementation costs will include acquiring and licensing fees and can be costly in terms of manpower and payments involved in the whole process. Also there are licensing fees that have to be paid to software firm (such as SAP, Oracle, or Microsoft) to allowed to implement the software. Once the software is installed, there is need for personal customization on order to comply with the specific business. This will come with additional costs hence need to be considered. Lastly the final cost to be considered is the maintaining cost. Since the company will be growing and implementing new strategies, the ERP will also require an upgrade and this will attract costs as set out by the manufacturer. Therefore it is upon the firm to consider which firm offers better costs but without compromising the quality of work the software will deliver. Nature of the business Different firms involved in different business activities will require different ERP systems that will suite their business activities. Therefore firms need to consider which ERP systems will suite their operations and how easy will it be to customize the software to conform to their operations and help them achieve competitive advantage over their competitors. Failure to consider this may result in difficulties in implementation when one may realize some functionalities not working. Technology All ERP systems are based on technology and rapid change in technology may cause the system to be obsolete over time. Therefore before choosing an ERP system, there is need to review the technology they are based on and decide whether the system is worth implementing since some systems may become obsolete after 3-5 years yet lots of money was invested in acquiring and implementation. Comparison Whether running SAP Business One or Microsoft Dynamics GP for supply management, most of the functionalities are the same. But there a few differences as illustrated in Table 1 below. Table 1: General Comparison of Systems SAP Business One Microsoft Dynamics GP Interface It is more complex than Microsoft Dynamics GP users need to be trained first before starting to use it The interface resembles the normal windows interface and it is a point and click system. Users can just pick it up and start using it without training Creation of functions Once the user has learnt how to use the system, creation of functions is just an easy step-by-step process It is point and click software and windows will normally pop up as one tries to create functions. Reports Generates and utilizes crystal reports to export to various file types (such as excel or word) Provides intelligent business reports which are exported directly to MS office files without use of any intermediary system. The reports can also be e-mailed. Ease of SCM use Provides a central location where managers to quickly pull out information and reports on all the stakeholder in the supply chain SCM managers will simply navigate and click on the different divisions to retrieve information and reports in the supply chain Table 2: Creation of suppliers SAP Business One Microsoft Dynamics GP Process This system walks the user through up to 10 info types where all initial employee information is entered Brings up the screen with all required information displayed Entering Additional Information It provides the user through all information that needs to be added. More user friendly once the menus have been properly navigated User clicks on additional information buttons to add any other information Table 3: Creating Divisions SAP Business One Microsoft Dynamics GP Name Organizational Unit Division Creation Can create multiple units at one time Only creates one division at a time Information about Division After creation of units, one has to go back and edit the data after the fact Division is created when all information (address, codes, phone #'s, etc.) is entered Table 4: Creation of departments SAP Business One Microsoft Dynamics GP Name Business Unit Department Creation Ability to create multiple units at one time Can only one department at a time Information about Department User has to back and edit after creation to get information about unit in the system Are created one at a time, and can immediately go into extra information Organizational Charts This is much easier, business units create under the different divisions by selecting the Org. Unit and then clicking create There is no option for adding a department to a division immediately, and you need to go in later and re-organize to do it Table 5: Assigning a contract to supplier SAP Business One Microsoft Dynamics GP Name Contract not assigned Available contracts Assigning contract Assign a supplier to a contract with a start and end date Award available contracts to available suppliers Interpretation It is very clear from the tables above that the majority of differences lie in the creation of items and the amount of information able to be entered initially. For Microsoft Dynamics GP, all the required information is brought on the first window, whereas SAP directs the user through each window methodically. Each of the ERPs has its own benefits i.e. SAP was easy once the menu was navigated properly but Microsoft made it much easier to get to the initial menu. Also, when using SAP the user goes through all windows to have the opportunity to enter a lot of the information about SCM, but this will be a waste of time since most of the windows will be skipped. Also differences are seen in the naming of various functions i.e. positions vs. seats, organizational units vs. divisions, etc. and just the visual presentation. However, the core functionalities of each are generally the same, because much of the information is necessary for compliance and for general administration. Generally the SCM across firms are generally the same with differences in the way the handle their supplies and the types of supplies they handle. Conclusion ERP systems are meant to make the business functionalities easier to carry out hence improving efficiency and productivity. However, each of these systems in as much as they instrumental is improving business processes; they too have their own weaknesses in functionality. For instance, SAP Business One is relatively more difficult to navigate and this makes it to be a more command based program than just a point and click which could be more user friendly. However the advantage of SAP Business One is that it allows easier global integration and once a user is trained on how to use the system, it becomes much more powerful program than the Microsoft Dynamics GP. With regard to comparative analysis, both platforms provide a common ground for creating division and departments that support proper running in the Supply Chain Management. They both focus on controlling the supply and demand ratios and ensuring proper supplies management and customer satisfaction. Managers must consider several factors prior to choosing an ERP system that best suits their firm. These factors include costs, nature of the business, technology involved in designing the system and ease of usage and customization. As long as these factors are considered, managers could be able to choose either system based on personal preferences, because functionalities of both the systems are almost very similar. References SAP (2013). Develop a responsive supply network – with our supply chain management (SCM) solutions. Retrieved from < http://www54.sap.com/solution/lob/scm/software/overview/highlights.html> Orchestra (2010). SAP Business One vs. Dynamics GP. Retrieved from < http://www.orchestrateam.com/blogs/sap-business-one-vs-dynamics-gp> CIO (2013). Supply Chain Management Definition and Solutions. Retrieved from < http://www.cio.com/article/40940/Supply_Chain_Management_Definition_and_Solutions> Read More