8/3/2019 ERP (08.03.11)

1/20

ENTERPRISEENTERPRISE

RESOURCE PLANNINGRESOURCE PLANNING

8/3/2019 ERP (08.03.11)

2/20

A business network is defined as a structureA business network is defined as a structureof interdependent relationships between theof interdependent relationships between theactivities of a given firm and those of otheractivities of a given firm and those of otherfirm in the competitive environment, whichfirm in the competitive environment, whichinfluence each others strategies.influence each others strategies.

Competitive success depends on how wellCompetitive success depends on how wellthe entire business network delivers value tothe entire business network delivers value toits ultimate customers compared toits ultimate customers compared tocompeting business network. Packagedcompeting business network. Packagedsolutions like SCM, CRM, ERP are used tosolutions like SCM, CRM, ERP are used toestablish business networking systems.establish business networking systems.

8/3/2019 ERP (08.03.11)

3/20

The Current Scenario The Current Scenario

Difficult to get timely and accurate informationDifficult to get timely and accurate information Heterogeneous hardware and software platformsHeterogeneous hardware and software platforms

and practices .and practices .

Poor connectivity between differentPoor connectivity between differentorganizational locations.organizational locations.

Sticking with obsolete technologySticking with obsolete technology

Resist to changeResist to change Lack of proven man-power to develop integratedLack of proven man-power to develop integratedsoftware.software.

8/3/2019 ERP (08.03.11)

4/20

What is ERP?What is ERP?

ERP is a solution, whichERP is a solution, which ERP integrate all data and processes of an organizationERP integrate all data and processes of an organizationinto a unified system.into a unified system.

A typical ERP system will use multiple component hardwareA typical ERP system will use multiple component hardwareand software to achieve the integration.and software to achieve the integration.

A key ingredient of most ERP systems is the use of unifiedA key ingredient of most ERP systems is the use of unified

database to store data for various system modulesdatabase to store data for various system modules ..

8/3/2019 ERP (08.03.11)

5/20

ERP-DefinitionERP-Definition

Software solution that addresses the enterpriseSoftware solution that addresses the enterpriseneeds, taking a process view of the overallneeds, taking a process view of the overallorganization to meet the goals, by tightlyorganization to meet the goals, by tightlyintegrating all functions and under a commonintegrating all functions and under a commonsoftware platform.software platform.

8/3/2019 ERP (08.03.11)

6/20

What does ERP integratesWhat does ERP integrates

DatabaseDatabase ApplicationsApplications

InterfacesInterfaces Tools Tools BPRBPR

8/3/2019 ERP (08.03.11)

7/20

Evolution of ERPEvolution of ERP In 1960s-systems just for inventory controlIn 1960s-systems just for inventory control In 1970s MRP-material requirement planningIn 1970s MRP-material requirement planning

(inventory with material planning and(inventory with material planning andprocurement)procurement)

1980s-MRPII-manufacturing resources1980s-MRPII-manufacturing resourcesplanning. (extended MRP to shop floor andplanning. (extended MRP to shop floor anddistribution management)distribution management)

Mid 1990s ERP-covering all the activities of Mid 1990s ERP-covering all the activities of

an enterprise.an enterprise. 2000 onwards-ERPII-collaborative commerce2000 onwards-ERPII-collaborative commerceextending ERP to external business entities)extending ERP to external business entities)

8/3/2019 ERP (08.03.11)

8/20

Why ERP?Why ERP?

Complete integration of a systems across theComplete integration of a systems across thedepartments in a company as well across thedepartments in a company as well across theenterprise as a whole.enterprise as a whole.

Only solution for better project managementOnly solution for better project management Better customer serviceBetter customer service Automatic introduction of latest technologies.Automatic introduction of latest technologies. Expertise database.Expertise database.

8/3/2019 ERP (08.03.11)

9/20

ERP-ExpectationsERP-Expectations

Integrating all the functionsIntegrating all the functions Integrating the systems running in all theIntegrating the systems running in all the

locationslocations

Transparency of information using a single data Transparency of information using a single dataresource across the organization.resource across the organization.

Software must be responsive , flexible, easy toSoftware must be responsive , flexible, easy toadd functionalities and provide growth path.add functionalities and provide growth path.

8/3/2019 ERP (08.03.11)

10/20

ERP SelectionERP Selection

Check whether all functional aspects of Check whether all functional aspects of business are duly covered.business are duly covered.

Check whether all the business functionsCheck whether all the business functions

and processes are fully integrated.and processes are fully integrated. Check weather all the latest IT trends haveCheck weather all the latest IT trends have

been covered.been covered. Check weather the vendor has customizingCheck weather the vendor has customizing

and implementing capabilities.and implementing capabilities. Calculate ROI.Calculate ROI.

8/3/2019 ERP (08.03.11)

11/20

Importance of ERPImportance of ERP Operational benefitsOperational benefits

- reduced processing cycle- reduced processing cycle- access to multi dimensional information- access to multi dimensional information- Empowerment of employees to become a decision makerEmpowerment of employees to become a decision maker- Effective cost control through use of cost data for business decisionsEffective cost control through use of cost data for business decisions- Increase in resource productivity.Increase in resource productivity.

Business benefitsBusiness benefits

- higher profits and improved ROI due to cost saving- higher profits and improved ROI due to cost saving- Improved working capital management due to reduced inventory andImproved working capital management due to reduced inventory and

receivables.receivables.- Higher utilization of resources reducing the cost production per unit.Higher utilization of resources reducing the cost production per unit.- Higher customer satisfaction due to prompt deliveries.Higher customer satisfaction due to prompt deliveries.

Management benefitsManagement benefits - Change management easy due t configurable feature of the ERP product.Change management easy due t configurable feature of the ERP product.- Strategic information about sales, production , resource usage.Strategic information about sales, production , resource usage.- Secured information access to authorized users.Secured information access to authorized users.- Cost of business reduced.Cost of business reduced.

8/3/2019 ERP (08.03.11)

12/20

What does drive ERPWhat does drive ERPapproachapproach

Business:Business: Customer SatisfactionCustomer Satisfaction

Business DevelopmentBusiness Development Ability to face competitionAbility to face competition Efficient processes required to pushEfficient processes required to push

the company to gear.the company to gear.

8/3/2019 ERP (08.03.11)

13/20

ERP implementationERP implementation

Cost analysisCost analysis Blue printining of business processesBlue printining of business processes

Staff trainingStaff training IntegrationIntegration Data conversionData conversion Going live with ERPGoing live with ERP

8/3/2019 ERP (08.03.11)

14/20

ERP AdvantagesERP Advantages

Integration among different functional areas toIntegration among different functional areas toensure proper communication, productivity andensure proper communication, productivity andefficiency.efficiency.

Design engineeringDesign engineering Order tracking from acceptable through fulfillment.Order tracking from acceptable through fulfillment. Tracking the three way match between purchase Tracking the three way match between purchase

orders, inventory receipts and costing.orders, inventory receipts and costing.

Eliminates the problem of synchronizing changesEliminates the problem of synchronizing changesbetween multiple systems.between multiple systems.

8/3/2019 ERP (08.03.11)

15/20

8/3/2019 ERP (08.03.11)

16/20

DisadvantagesDisadvantages

Customization of ERP software is limited.Customization of ERP software is limited. ERP systems can be very expensiveERP systems can be very expensive Resistance in sharing sensitive internalResistance in sharing sensitive internal

information between departments caninformation between departments canreduce the effectives of the software.reduce the effectives of the software.

The system may be too complex measured The system may be too complex measured

against the actual needs of the customer.against the actual needs of the customer. ERP systems centralize the data in one placeERP systems centralize the data in one place

so the risk of increasing th4e sensitive data.so the risk of increasing th4e sensitive data.

8/3/2019 ERP (08.03.11)

17/20

8/3/2019 ERP (08.03.11)

18/20

ApplicationsApplications Sales, marketing, distributionSales, marketing, distribution ManufacturingManufacturing Stores managementStores management FinanceFinance PersonnelPersonnel MaintenanceMaintenance Purchase, inventoryPurchase, inventory Planning and controlPlanning and control

8/3/2019 ERP (08.03.11)

19/20

8/3/2019 ERP (08.03.11)

20/20