What is ERP?Enterprise resource planning (ERP) is businessmanagement software that allows anorganization to use a system of integratedapplications to manage the business.
Being Specific ERP systems are large computersystems that integrate application programs inaccounting (i.e., accounts receivable), sales(i.e., order booking), manufacturing (i.e.,product shipping) and the other functions in thefirm. This integration is accomplished
A typical ERP system will use multiplecomponents of computer hardware & softwareto achieve the integration.
A key ingredient of most ERP systems is the useof a unified database to store data for varioussystem modules.
Broken down into business processes
HRM
DistributionFinancialsManufacturing
1960’s - Systems Just for Inventory Control
1970’s - MRP – Material Requirement Planning(Inventory with material planning &procurement)
1980’s - MRP II – Manufacturing ResourcesPlanning (Extended MRP to shop floor&distribution Management.)
Mid 1990’s - ERP – Enterprise ResourcePlanning (Covering all the activities fanEnterprise)2000 onwards – ERP II – Collaborative Commerce(Extending ERP to external
Reasons for adopting ERPIntegrate financial information
Integrate customer order information.
Standardize and speed up operations processes
Reduce inventory burden
Standardize Human Resources information
Common database
Update one module, automatically updatesothers
Limitations of ERPHigh cost.
Forced change of processes
Complaxity
Lack of trained people
Flexibility of software system upgrades
Implementation timelines
Availability of internal technical knowledgeand resources
Selecting ERP VendorsDepending on your organizations size and needsthere are a number of enterprise resourceplanning software vendors to choose from in thelarge enterprise, medium market and smallbusiness ERP markets.
Large Enterprise ERP (ERP Tier I) The ERP marketfor large enterprises is dominated by threecompanies: SAP, Oracle and Microsoft.
The ERP market for small and medium enterprisesis dominated by :SalesBabu Business solutions
ERP Implementation PracticesProject Management
Organizations link implementation teams toboth the technical (IS) and functionaldepartments.
They tightly control implementation processes
They appropriately use consultants throughoutthe implementation process
They manage turnover of key implementationemployees
ERP Implementation Practices
Change Management
Redesigned jobs call for higher levels of skillsand accountability
Change management is viewed as more thanjust increased training and communication
Enterprise-wide systems drive redesignedchanges
The executive sponsor is the change agent.
ERP Implementation Practices
Technology Excellence
Organizations rely heavily on the ERPpackage as the majority of their applicationconfiguration
Organizations implement ERP packages ontime and within budget
Organizations centralize support groupswithin their IT departments
Success of ERPAutodesk (computer aided design software
maker)Reduced delivery time from two weeks to less than 24 hours
IBM Storage Systems Division
Reduced time to re-price – 5 days to 5 minutes
Time to ship a replacement part – 22 to 3 daysTime to shipa replacement part – 22 to 3 days
Time to complete a credit check – 20 minutes to 3 seconds
SalesBabu Business Solutions
New Developments InERP
Availability of web-based and wireless ERPsystems
Adoption of easy-to-install ERP systems
Linkage to other software systems, e.g., supply chainmanagement system, e- commerce, customerrelationship management system