What is Enterprise resource planning (ERP) ? Why testing required for Enterprise resource planning (ERP) application ?

Enterprise resource planning (ERP) is a category of business systems which plans the resources in an enterprise (business) in an effective manner.

It integrates internal and external management information across an entire organization, including finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application.

The purpose of ERP is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders.

Growth of ERP applications:

According to ARC Advisory Group, the worldwide market for enterprise applications has grown to $43 billion by 2011, a compounded annual growth rate (CAGR) of 8.3%.

The Indian ERP market experienced CAGR (compounded annual growth rate) of 25.2 during the period of 2004-2009. The market was $83 million in 2004, and is projected over $250 million in 2009, according to a research report.

The report by some firm says that by 2016, India’s share of the software market in Asia/Pacific is expected to reach 12.1 per cent, representing $5.4 billion in revenue, or 1.5 percent of total worldwide software market revenue of $361 billion.

The ERP market will be $45.5 billion in 2011, up from $43 billion in 2010. The market should hit $50.3 billion in 2015.

ERP Domain Testing

Ø  ERP Testing is a procedure that usually occurs before a company fully implements an ERP software package and the software goes live. It is done in order to identify certain situations may arise after the implementation has been completed, such as determining operational responsiblies , training needs, and problem management procedures.

Ø  It can be considered as series of dry runs before actual deployment of the system to the companys business operations.  ERP testing is an essential step.  Skipping this stage could pose serious risks to the whole implementation of ERP solution. 

Ø  The largest vendors of ERP systems today include SAP AG and Oracle, Info (Infor ERP LN is the flag ship ERP Product - Ln is the latest version of Baan ERP)

Ø  Firstly develop a test script so that a full end to end test can be performed and ensure that the results you get are the results you expect.

Ø  It is suggested to firstly create a process flow to diagram what you believe the process is. This process is subject to change during the development of the test script and unit testing.

Ø  Once you have the process flow documented, you can then does a system walk through to see if the existing software will do what the process calls for. If not, then development will be needed to meets the business needs.

Ø  Once development is completed, the true unit testing occurs. Integrated testing must be done on all possible scenarios that may come out of the business process (different variations of the same process)

Ø  Once unit testing is approved, then the solution can be delivered to the client. After this is done, the client should be given the details of the test plan so that they can also do scenario testing to get an agreement on the solution.

         

Need of testing in ERP applications:

·         Through ERP testing, companies can easily manage the full implementation of the business software.

·         The tests will definitely help managers understand and grasp the intricacies of ERP implementation.

·         ERP testing will also minimize losses and mistakes which could increase the ROI of ERP implementation. 

·         Another important benefit of ERP testing is that users and technical staff of companies can gain enough confidence in running the system.  This is important in order to avoid guess work and trial and error methods in ERP implementation. 

·         Finally, employees who will operate the ERP system can gain experience from the software testing.  This will serve as a training period for them.  Through this, the implementation of ERP systems will not be exposed to unnecessary risks which could be detrimental to the operations of the company.