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Cloud Based ERP System For SME Industry: Cite This Paper
Cloud Based ERP System For SME Industry: Cite This Paper
Abstract— The Enterprise resource planning (ERP) system the same key performance indicator (KPIs). Thus, a well-
has become the necessity of nearly all businesses. ERP designed ERP program helps to reduce expenses, increase
architecture incorporates and defines a multitude of business productivity by improved procedures, and effectively
processes and facilitates information transfer between them. maximize the use of capital equipment and manpower [4]. The
An ERP system prevents duplication of information and aim of this paper is to simplify the small and medium sized
ensures data integrity by gathering shared transactional shared enterprises SME business operations by offering a flexible
data from multiple sources of an enterprise. There is a range of cloud-based ERP platform. There are two main contributions
ERP systems available providing solutions to large businesses, of the paper. First is the development of user friendly cloud
however ERP systems for small and medium-sized businesses based ERP that will automate all industrial operations from
are obligatory. SMEs are small and medium-sized enterprises order, inventory control to financial accounting and
with 4 to 5 divisions. Such divisions are modeled by industrial distribution with their real time connection of all the
ERP into application modules and implemented to provide a departments of industry. Second main contribution is real time
complete solution for SMEs. In this paper a cloud-based ERP intelligent report generations for the owners and managers of
system is designed using new technologies and systems that industry. As Pakistan is an agricultural country so the
provide an easy-to-use and user-friendly platform for SMEs. developed ERP can cater the services to the spinning industry,
The developed ERP system’s graphical and tabular reports ginning industry, food chain industry, flour industry etc.
will assist the company's owner to monitor its company's The paper is comprised of seven sections. After introduction
activities and make better decisions. some of the existing ERP solutions are discussed. Section
three explains the motivation of this work. In section four
Keywords-component; ERP; SME; Cloud; SME sector of Pakistan is discussed. The implementation
details our ERP are discussed in section five. Performance
testing is discussed in section 6 and finally section seven
I. INTRODUCTION
concludes the paper.
Enterprise resource planning systems’ (ERP) can be referred
to as software packages that companies use to organize or II. EXISTING SOLUTIONS
handle their daily business operations such as recruitment, There are number of ERP solutions which are used by
payroll, project management and preparation, production and many organizations, depending upon the size and business
asset planning [1]. ERP technology packages are structured to functions carried out in their organizations. In the past
coordinate and gather data from different institutional levels decades, ERP systems’ usage numbers have increased
and link their business activities through different tremendously, and the worldwide ERP market summed 22.4
departments. This technology is a key tool in the sector to billion euros by 2013. The competition is fierce, and the top
control order management, procurement and manufacturing five companies represent half of the market (SAP: 24%;
[2]. It also tracks market capital between stakeholders such as; Oracle: 12%; Sage: 6%; Infor: 6%, and Microsoft: 5%) [9].
orders, staff, sales, supplies, and capacity to produce. All this Some of which are discussed in this section.
is achieved in a single dynamic database management
platform with an advanced insights dashboard. A. Sap
ERP systems are important today to operate thousands of Sap offers the ERP solution for large enterprises (LEs).
organizations of all sizes across all industries. A structured This encompasses the key business activities of an enterprise
approach to ERP may allow a company to standardize and spanning from logistics (Sales & Marketing, Inventory
simplify its business processes and improve operational Administration, Project Control, Logistics Delivery, and
efficiency. The integrated approach to business process Quality Management) and Fiscal (Financial Accounting,
management ensures that, in addition to saving time and Business Accounting, Economic Supply Chain Management)
money, everybody deals with the same data and implements to Human Capital Management (Training, Payroll, E-
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International Journal of Computer Science and Information Security (IJCSIS),
Vol. 17, No. 12, December 2019
Recruiting) and Corporate Support (Travel Management, the core of the introduction of ERP systems due to
Enterprise Management). A Sap solution's cost of delivery and globalization, alliances, quality networks and the massive flow
maintenance can vary greatly based on the enterprise. An of information across and through SMEs. Adoption threats
empirical study conducted on the factors involved in choosing focus on the reality that SME companies have limited
of ERP for an organization concluded that, organization size resources and specific features that differentiate their situation
has a huge impact on the choice of the software package [3]. from LEs. Existing ERP systems are very complex and some
The study further commented that Sap is a clear choice for LEs. organization may not adjust to the ERP software [6]. People
The panorama consulting survey of 2016 reports that Sap has are using only 20% functionalities although they are paying
the longest implementation duration as compared to the other much money [7].
counterparts [10].
Cloud based ERP [14-15] is a new approach for ERP
deployment that makes use of modern cloud computing
B. Qt9
platform and their relevant services to provide and business
The QT9 ERP [11] offers tools for automating small to more flexibility in process transformation. SAAS cloud
medium-sized manufacturing processes. QT9 ERP is built in computing provides all services and ensures the availability of
.NET technology with an SQL Server database structure which data all the time. The cloud-based ERP software is particular
makes for simple upgrades, implementation and training. The value to small businesses. Cloud computing would enable a
framework is compliant with Windows operating systems only company’s accounts and other financial information to run in
and draws all available data into one location using screen
the cloud thus, preserving it from theft or any other kind of
grids. QT9 Corporate management planning functionalities
include: Supply Tracking, Market Identification, Quoting, threat.
Supplier Management, Finance, Purchase Orders, Processing, IV. SMALL MEDIUM-SIZED ENTERPRISE SECTOR IN
Invoicing, Inventory Control, Purchasing, Task Scheduling and PAKISTAN
Work Planning. QT9 is however slow in processing and the
system is not connected to other business processes. SME businesses are companies that have below a certain
minimum revenue, capital or a number of employees.
C. Microsoft Dynamics According to SMEDA [17] statistics, there are around 3.2
million SME businesses in Pakistan. Their average GDP share
It is a product by Microsoft developed for medium to large
is 40% [5]. The standard ERP systems designed for LEs are
level enterprises [12]. It’s a cloud-based ERP system which
very expensive and possess unnecessary features which make
facilitates the automation of following business activities:
them complex for use in SME’s. SMEs cannot buy software
purchasing, accounting, inventory management and sales
which costs more than their annual revenue. Therefore, it is
activities. Nonetheless, it has minimal cross-platform support
highly important to provide these enterprises a digital solution
including specific application functionality, operating systems,
which can automate their business activities and is feasible
and servers. In addition, lack of some elements and the
with cost and functions. In this research work, first the
interaction with third party functionalities leads towards
requirements are gathered from SME’s to analyze what kind
complexities of integration.
of activities take place in their key business processes and then
D. Oracle a cloud-based ERP solution well-suited to their needs is
Oracle Enterprise Resource Planning (ERP) Cloud and Oracle proposed and developed.
Enterprise Performance Management (EPM) Cloud provide a
V. IMPLEMENTATION METHODOLOGY
robust, creative and validated platform for enterprises of all
sizes that want to compete in the digital environment [13]. In this section the detailed implementation steps are
Oracle is the one platform for the entire business of industry depicted which include requirement gathering, architecture
standards and current best practices handling accounting, and technology used, modules of ERP system, the process
financial planning and analysis (FP&A), revenue recognition, flow between them, development and working of cloud-based
risk management, regulation, enforcement, acquisition, project ERP system.
planning, tax reporting, fiscal closing, and so much more. One A. Requirement Gathering and Analysis
of its main drawbacks, though, is that it can be less user-
friendly than some other platforms— especially for SMEs. Various SMEs were contacted to get an insight into their
The software also has a number of plugins that work, but they key business activities for development of ERP solution.
don't function as well as on other platforms. The Oracle E- Depending upon those activities the ERP modules which were
Business Suite's default tax module and marketing modules common in almost all SMEs are Finance and accounting, Sales
are often not sufficient, prompting enterprises to choose their and Distribution, Material and Planning, Production and
own custom-built systems. Human Resources modules were agreed upon for the proposed
system. Requirements were gathered for the intended ERP
III. MOTIVATION system depending on nature of modules. For accounting
module, meeting with professional accountant was held to
All of the ERP solutions mentioned in section II cater to
make sure the software meets the needs of accounting
LEs and none of them is suited for SMEs which leads to the
efficiently. Requirements about specific modules and their
motivation for this research work. Such SMEs have become
interconnections were gathered by using SAP ERP system
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during internship at Fauji Fertilizers Company at Mirpur Depreciation, Projection and Simulation). It gives the ability to
Mathelo, Sindh [18]. SAP manuals were thoroughly studied to monitor financial accounting information globally within a
understand the working of SAP focusing on business needs multi-company, language & currency global system. The
and activities of SMEs. To understand the business activities General Ledger covers all the Financial Accounting System
and their workings, carried out in SMEs, various industries functions that are required.
were visited which are: Mehran Cotton Factory Daharki, Kotri b) Treasury: (Cash Management, Treasury Management
Floor Industry, Khairpur special economic Zone [19], JDW and Funds Management).
Sugar Mill Ubaro [20]. SMEDA official website was visited
for a thorough understanding of SMEs. SMEDA is an c) Control: (Budgetary Control, Activity Based Costing,
association for SME’s in Pakistan which sets standards of Overhead Analysis & Control, Product Costing, Profitability
SME’s and keeps the record of SME’s growth in Pakistan. The and Analysis).
requirements were analyzed to be filtered into relevant and d) Enterprise management: (Executive Information
irrelevant requirements. A formal document was prepared System, Benefit Center Reporting, Market Planning).
after refinement of requirements.
B. Architecture and Technology
After the requirements were gathered, the architecture and
technologies were decided which fulfill the desired
requirements. In our ERP system we implemented the
predefined ‘Three tier Architecture’ [8] in which the system is
divided in three separate layers.
• Presentation tier.
• Logic tier.
• Data tier
The technologies which were employed for the
implementation of our ERP system for SMEs according to the
3-tier architecture are shown in Fig.
1.
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International Journal of Computer Science and Information Security (IJCSIS),
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enforcement, etc. It assists with the testing of products and e) Invoice verification: This provides link between MM
their quality assurance. Product testing sub-system is fully and Finance Module thus allowing processing of material &/or
combined with other systems such as Purchasing, Shop Floor services invoices, credit memos, discounts etc.
Control and Inventory Management, thereby ensuring daily
reporting of quality control procedures.
d) Cost management: ERP Packages contain cost
information at various levels to help define value factors and
increasing product costs.
e) Others : Data Management and Change Control,
Configuration Management & Tooling, Just in Time Approach
are also the sub-systems of this module.
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International Journal of Computer Science and Information Security (IJCSIS),
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E. Working of Cloud Based ERP System For cloud implementation of the developed ERP, a
commercial virtual private server (VPS) was
The layout of the developed cloud-based ERP for SME
purchased. Linux, JDK, SQL database and apache server was
industry of Pakistan is presented in Fig. 7. It shows the
installed on VPS Server. The J2EE code of ERP system was
hierarchical view of the four main modules our cloud-based
converted to WAR File. The WAR file of project was
ERP which are Finance and accounting, Sales and distribution,
uploaded on Apache Server by using FTP. After successful
Material and planning, and Production.
uploading on server we were able to access the ERP on cloud
Finance & accounting module have master data, types of
virtual private server. Fig. 9 depicts the cloud based ERP
Accounts, transaction type, Reporting, Dashboard and to do
working. When the user of ERP requests for data from the
list. In Master data, a form is shown in which master data
cloud, the data is downloaded from the cloud and saved in
about financial detail is collected like financial years, financial
XML file. Then XML file is parsed through ‘XML generator’
terms and etc. In types of accounts, accounts and its types are
and send to the application in required form. The data can be
selected. In types of transaction, the whole financial
seen in table or form as per requirement. If an event is
transaction is defined. Reporting will show all reports related
triggered in ERP like changes in the journal or submit form or
to financial transaction. Dashboard will show centralize data
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International Journal of Computer Science and Information Security (IJCSIS),
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another related operation, the related data is uploaded. This Another interesting functionality of our ERP system is
data is converted in XML and send through outgoing request. dashboard. This board displays all the summarized
Then the file connector uploads this data on the cloud and vice performance of enterprise visually. Cloud based ERP system
versa. displays the account details like top five vendors, cash in hand,
cost, profit etc. via graphs and charts. These graphs are
1) Reports Generated by Accounts and Finance module: dynamically updated by our ERP system in order to facilitate
In reporting of this module, there are number of reports that the owner of the company. We have used bootstrap technology
our cloud based ERP system dynamically generates. These which enables the ERP system to automatically adjust screen
reports include tabular as well as visual reports. according to device capacity like smart phone, tablet or laptop.
For general Ledger we have included financial Statement from the database which is shown in Fig. 10. This financial
which will be generated automatically by picking up the data statement will be updated after every single transaction done
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International Journal of Computer Science and Information Security (IJCSIS),
Vol. 17, No. 12, December 2019
by the enterprise. Financial statement will include all the The main functionality of this module is dynamically
details like sales, expenditure and profit earned. Balance sheet generated “To do list” shown in Fig. 12. This feature makes it
generated by finance module is shown in Fig. 11 which is the very easy for the accounting personnel to thoroughly read files
backbone of business. Whenever investors invest in a and finalize tasks. To do list will display all the tasks that an
company, they look into their balance sheets to see the growth employee has to perform during the day. It increases the
of company. performance of company along with reducing manual
overhead on managers. It will automatically create tasks that
an employee has to perform including payments for purchase
requisition etc. As soon as task is completed, it will be
removed from the task list.
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International Journal of Computer Science and Information Security (IJCSIS),
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depicted in Fig. 16. The x-axis in the graph shows the months
and y-axis shows the number of orders made in those months.
The top 5 purchases with their names and amounts are shown
in Fig. 16.
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International Journal of Computer Science and Information Security (IJCSIS),
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Figure. 16 . Purchase made graph 2 Forms 250 0.00% 3.4 3.2 10.32
3 sendForms 250 0.00% 3.6 2.9 1.52
4 Reports 250 0.00% 3.9 2.5 11.49
VI. CONCLUSION
Information technology plays a vital role in the world's
business digitalization. Companies now want to simplify their
business processes. Enterprise resource management programs
therefore matter greatly to them. Existing ERP solutions such
as SAP, ORACLE are far too expensive to use for such
companies, so there is a need for SMEs to have an ERP
system. Our proposed cloud-based ERP focuses specifically
on SMEs businesses and has four main modules which
provide an integrated solution to companies. The developed
Figure. 17 . Production order report. ERP system delivers a solution to SMEs in real time,
including voucher types of transactions, placing orders,
F. Testing of the Cloud Based Erp shipping them, etc. The system has both graphical and tabular
Performance testing of the developed cloud-based ERP has reports that help the company's owner to monitor its
been performed using Apache Jmeter. In this regard, ERP company's growth remotely through the internet. Sales and
system was uploaded on server. The numbers of threads orders are better understood by visual coverage which enables
(users) were allocated to test the application. The HTTP managers make better decisions. The results of performance
requests were sent for different modules. Four tests are being testing are also depicting satisfactory response time and
performed in JMeter. In all tests 250 threads are added and throughput.
HTTP request is send. The output includes throughput,
response time, percentage of error and amount of received
data. Zero percent error is observed in all the tests. The Test#1 REFERENCES
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AUTHORS PROFILE
[7] D. Nathanael, B. Papantouniou, and D. Papageorgiou, "ERP
implementation and actual work practice in SMEs: a dialectic
perspective," Stimulating Manufacturing Excellence in Small and Amir Mughal is software engineer in Aesthetic Technologies Islamabad
Medium Enterprises (SME) Conf., June 2015. Pakistan. He obtained his BE(Software Engineering) from Mehran
[8] B. Xu, and S. Wan, “The Design Strategy of Component Method in University of Engineering and Technology Jamshoro Sindh, Pakistan.
Three-Tier Architecture,” IEEE In 2015 2nd Int. Conf. Information His research area is to solving SME business and management problem
Science and Control Engineering (pp. 500-503). April 2015. by using latest technologies so that their business can be scalable and
earn more profit.
[9] C. Pang, Y. Dharmasthira, C. Eschinger, K. F. Brant, and K.
Motoyoshi, “ Market share analysis: ERP software,” 2013. Sania Bhatti is working with the Department of Software Engineering,
[10] Panorama Consulting Solutions. (2016), Clash of the titans 2016 An Mehran University of Engineering and Technology, Jamshoro Sindh,
Independent Comparison of SAP, Oracle, Microsoft Dynamics and Infor Pakistan. She obtained her PhD from the University of Leeds, the United
, Available: http://panorama-consulting.com/resource-center/clash-of- Kingdom in 2010 under the scholarship of the faculty development
the-titans-2016-sap-vs-oracle-vs-microsoft-dynamics/. program. Her research interests include modelling, simulation,
communication networks and machine learning algorithms. She has
[11] ERP A QT9 software solution, Available: http://www.qt9erp.com/ published more than twenty national and international Journal papers
[12] Why dynnamics 365?, Available: https://dynamics.microsoft.com/en- and various international conference papers. She was awarded with two
us/why-dynamics365/ research grant by Microsoft in the field of Artificial Intelligence as
[13] Why Oracle ERP cloudyou’re your business ?, Available: principle investigator.
https://www.oracle.com/applications/erp/ Hira Noman is working with the Department of Software
[14] H. Y. Lee, and N. J. Wang, “Cloud-based enterprise resource planning Engineering,Mehran University of Engineering and
with elastic model–view–controller architecture for Internet realization,” Technology,Jamshoro Sindh, Pakistan. She obtained her Masters from
Computer Standards & Interfaces,vol. 64, pp. 11-23, May 2019. Mehran University of Engineering and Technology, Jamshoro Sindh,
Pakistan in 2014. Her Her research interests include semantic web,
[15] A. H. Zadeh, B. A. Akinyemi, A. Jeyaraj, and H. M. Zolbanin, H. M, software sustainability and machine learning. She received her B.Eng. in
“Cloud ERP Systems for Small-and-Medium Enterprises: A Case Study Software Engineering from Mehran University of Engineering and
in the Food Industry,” Journal of Cases on Information Technology Technology, Jamshoro, Sindh Pakistan, in 2009, respectively.
(JCIT), vol. 20, pp. 53-70, Oct 2018.
Daniyal Ahmed is pursuing his B.E in the Department of Software
[16] S. Desai, T. R. Shivam, V. Solanki, and R. Mishra, "Cloud ERP for
Engineering, Mehran University of Engineering and Technology,
Small and Medium Enterprises," IEEE Second Int. Conf. on Electronics, Jamshoro Sindh, Pakistan.
Communication and Aerospace Technology (ICECA). 2018, March, pp.
1-3
[17] Small and medium enterprise development authority, Available:
https://smeda.org/
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