Enterprise Resource Planning

• a business strategy & set of industry-domain-specific applications

• build customer and shareholdercommunities

• value network system by collaborativeoperational and financial processes

Evolution

P

Inventory control

MRPMRPII

E ERP

1960’s 1970’s 1980’s 1990’s

MRP IMR

Characteristics

• Integration

• Packages

• Best Practices

• Assembly Alignment

• Evolving

PLANNING

• To support business goals– Integrated, on-line, secure, self-service

processes for business

– Eliminate costly mainframe/fragmented technologies

• Improved Integration of Systems andProcesses

• Lower Costs

• Empower Employees

• Enable Partners, Customers and Suppliers

ERP Implementation

• People– Project Structure– Should be aligned to processes

• Process– Implementation Process (outlined in detail)– Adapt your processes to those of the ERP.

• Technology– Hardware– Software– Integrated Systems

Enterprise Resource Planning• ERP systems correlates the data generating in an

enterprise

Complete

Real time

Consistent

Core ERP components

Accountingand

finance

Productionand materialsmanagement

Human resource

Business intelligence

Customerrelationshipmanagement

Supply chainmanagement E-business

Extended ERP components

Implementation

• Bing Bang

• Phased

• Parallel

A Business Example

Purchase

Qty.

Value

Vendor

Payable

FA

HR

Wages Salary

Sales

Order

Bill

Customer

ReceivableOther Business

Associates

Statut.Bodies

Share Holders

Production/Service Enterprise

ERP Benefits

• Improve productivity

• Increase customer demand (sales)

• Increase competitive advantage

• Increase market share

• Position company for sale

• SCM systems focus specifically on

• CRM systems focus specifically on

The organization before ERP (systems)Isolated Information:Update issues RedundantInaccurate InformationDifferent databases with different informationCan’t access information maintained by another department

ERP: Bringing the Organization Together• ERP – integrates

(or integrated set of IT

systems) so that employees can make enterprise wide decisions by viewing enterprise wide information on all business operations ( enterprise wide information)

Keyword inERP is “enterprise”

ERP systems focus onall processes, departments and

operations for the entire enterprise

Sales

Acctg

We don’t need this ERP stuff. Wealready have enterprise wide

software that we are all using. It iscalled a SPREADSHEET.

Enterprise Resource Planning• ERP systems

and correlates the data generating an enterprise wideview that is consistent and real-time.involved in sourcing, producing and delivering a company’s product

• C

• Complete

• Real time

• Consistent

• O

Components of ERP Software• Three core components focus on

(accounting/finance, production/materials management and HR)

• Extended components typically focus onand require interactions with customers, suppliers andbusiness partners– Typically

Internet enabled.

Make sure thatyou know whateach component

typicallyhandles.

Skipped details

slides follow

CORE ERP COMPONENTS• Accounting and finance component – manages

accounting data and financial processes within theenterprise with functions such as general ledger, accounts payable, accounts receivable, budgeting,and asset management

• Human resource component – tracks employeeinformation including payroll, benefits, compensation, performance assessment, and assumes compliance with the legal requirementsof multiple jurisdictions and tax authorities

CORE ERP COMPONENTS• Production and materials

management component– handles the variousaspects of production planning and execution such as demandforecasting, productionscheduling, job cost accounting, and quality control

Extended ERP Components

• Extended ERP components include:– Business intelligence

• Tools to help analyze your business information and better understand it so that you can better understand the business.

– Customer relationship management

– Supply chain management

– E-business• E-logistics – manages the transportation and storage of goods

• E-procurement – the business-to-business (B2B)

purchase and sale of supplies and services over the Internet

Enterprise Resource Planning(ERP)

ERP Benefits1. Having integrated systems helps

that many businesses had previouslystarted to use (also didn’t have to fix those old legacy systems)

2. Integrate financial information and customer order information

3. Everyone working with the same informationand removes misinformation

4. Standardize and speed up manufacturing processes, as well as reduce inventory

5. ERP addresses the

6. One of the greatest benefits of an ERP system is

. Provides organizations with information that was previously difficult (if not impossible) to obtain, allowing the organization to perform more efficiently and effectively.

ERP Risks (Costs)

Difficult to Employees

• Costly in terms of

One vendor risks: too costly to .

Company essentially held hostage.

Vendor/Web Address ERP Specialties/Characteristics Target Market

SAPwww.sap.com

Oracle/People Softwww.oracl . m

SSA Global (Baan)ww w .ssagloba l.com

Microsoft (Great Plains)www.m1crosoft .com

Microsoft Business Solutions Great Plains

Dynamics Customer relationship management, financial management, human resource management, and supply chainmanagement

Financial management, human resource management, and supply chainmanagement

Customer relationship

management, financialmanagement, human resource management,and supply chain management

Financial management, distribution, manufacturing, project accounting, human resource management, and business analytics

Large business

Large business

Large business

Small-to-mediumbusiness