erp in detail
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ENTERPRISE RESOURCE PLANNING{ERP}
RASHMI VAISHYA
PGDBM-IROLL NO - 14
History of organizational systems
Calculation systems Functional systems
1950-80Single purposeEliminate tedious
human workExamples: Payroll,
General ledger, Inventory
Technology used: Mainframes, magnetic tapes, batch processing
1975-20??Use computers to
improve operationsApplications: HR,
order entry, manufacturing resource planning
Technologies: Mainframes, PC’s, LAN’s
Solution to disparate systems? Integration Consolidation Right-sizing Business Process Redesign Enterprise wide system
Problems with the above systems Sharing of data between systems Data duplication Data inconsistency Applications that don’t talk to one another Limited or lack of integrated information Isolated decisions lead to overall inefficiencies Increased expenses
Evolution of ERP
What is ERP??? An ERP system is an attempt to integrate all
functions across a company to a single computer system that can serve all those functions’ specific needs
“Integration” is the key word for ERP implementation
ERP is a set of integrated business applications, or modules which carry out common business functions such as general ledger, accounting, or order management
ERP is a process of managing all resources and their use in the entire enterprise in a coordinated manner.
ERP System
Components of ENTERPRISE MANAGEMENT SYSTEMS (EMS)
What makes ERP different???
Integrated modules Common definitions Common database Update one module, automatically
updates others ERP systems reflect a specific way of
doing business Must look at your value chains,
rather than functions
Benefits of ERP• Improved speed and efficiency, integration, flexibility • More complete access to information• Use of latest technology with fewer errors • Help in integrating applications for decision making and
planning• Allow departments to talk to each other• Easy to integrate by using processed built into ERP software• Better Analysis & planning capabilities• Better management of resources reducing the cost• Customer satisfaction increase due to shorter delivery cycle• Business operations transparency between business
partners & customers• Lower total costs in the complete supply chain• Shorten throughput times• Sustained involvement and commitment of the top
management
ERP in Action
SalesInventoryProduction
Staffing
PurchasingOrder Tracking Planning
An ERP Example: Before ERP
Customers
CustomerDemographic
FilesSales Dept.
Vendor
OrdersParts
Accounting
AccountingFiles
PurchasingPurchasing
Files
Order is placed
with Vendor
Invoicesaccounting
InventoryFiles
Warehouse
Checks for Parts
Calls back “Not in stock”
“We ordered the parts”
“We Need parts #XX”
“We ordered the parts”
Sends report
Sends report
Sends report
Ships parts
An ERP Example: After ERP
Database
Customers Sales Dept.
PurchasingWarehouse
Accounting
Vendor
Inventory DataIf no parts,
order is placedthrough DB
OrdersParts
Order is submittedto Purchasing.
Purchasing recordorder in DB
Order is placedwith Vendor
And invoices accounting
Financial Data exchange;Books invoice against PO
Books inventoryagainst PO
Ships parts
Vendors
Total Revenues, 2000
SAP32%
Other36%
Oracle15%
Peoplesoft9%
J.D. Edwards5%
Geac Computer3%
Source: AMR Research, 2001
ERP Market
ERP Implementation Steps• A user meeting is arranged to explain the ERP & process of
implementation• The RDD & the DRDD is explained for understanding & approval• The resources to carry out the changes in the system• The DERP (Deviation ERP) solution is tested• The solution is tested on a sample data of substantial nature• The solution is then demonstrated to the users for their
understanding & confirmation• The users are trained to run the solution & resolve the difficulties
in operations of the system solution• The change over from the manual system to the ERP solution are
planned, taking care of cut off dates, the opening balances, the data transfers etc.
• Log book of system usage is kept to make note of problems, solutions, modifications
• The document is updated with changes • The system performance is checked• Review meeting with users
RequirementAnalysis: RDD
1
Gap analysisFor review
3
ERP productConfiguration
4
FunctionalImplementation
5
TechnicalImplementation
6
User trainingHand holding
TestingUser feedback
Review7
Fig: 9 steps is ERP implementation
Project & processReview
9
Implement fully8
Product mapping to RDD
2
How Do ERP Systems Work??
Hidden Costs of ERP• Training• Integration and testing• Data conversion• Data analysis• Consultants• Replacing best and brightest staff after
implementation• Implementation teams can never stop• Waiting for ROI• Post-ERP depression
Advantage How
Reliable information access Common DBMS, consistent and accurate data, improved reports.
Avoid data and operations redundancy
Modules access same data from the central database, avoids multiple data input and update operations.
Delivery and cycle time reduction Minimizes retrieving and reporting delays.
Cost reduction Time savings, improved control by enterprise-wide analysis of organizational decisions.
Easy adaptability Changes in business processes easy to adapt and restructure.
Advantage How
Improved scalability Structured and modular design with “add ons.”
Improved maintenance Vendor-supported long-term contract as part of the system procurement.
Global outreach Extended modules such as CRM and SCM.
E-Commerce, e-business Internet commerce, collaborative culture
Disadvantage How to overcome
Time-consuming Minimize sensitive issues, internal politics and raise general consensus.
Expensive Cost may vary from thousands of dollars to millions. Business process reengineering cost may be extremely high.
Conformity of the modules The architecture and components of the selected system should conform to the business processes, culture and strategic goals of the organization.
Vendor dependence Single vendor vs. multi-vendor consideration, options for “best of breeds,” long-term committed support.
Disadvantage How to overcome
Extended ERP capability Consider middle-ware “add-on” facilities and extended modules such as CRM and SCM.
Features and complexity ERP system may have too many features and modules so the user needs to consider carefully and implement the needful only.
Scalability and global outreach Look for vendor investment in R&D, long term commitment to product and services, consider Internet-enabled systems.
Survey of ERP implementation
sDone by
ittoolbox.com
Overview
• 375 IT and business professionals • 52% anticipate budget increases for
new ERP implementations/new modules
• SAP and PeopleSoft/J.D. Edwards were cited as the most popular ERP packages
• 46% indicated that the main challenge to successful ERP implementations was inadequate definition of requirements and resistance to change
How would you characterize your budget for new ERP implementations/new modules deployments for 2004
compared to your budget in 2003?
Who is directly responsible for determining your ERP
implementations/new modules deployments?
Who are the other key decision-makers/influencers in decisions to add new ERP packages/new modules?
Do you currently have an ERP package?
If your answer is "Yes", which ERP package(s) do you currently use?
Are you considering adding new modules to your existing ERP package?
If your answer is "Yes", which modules are you planning to add?
If you plan to deploy a new ERP package and/or add modules to your existing packages, when would this
implementation take place?
Who do you partner with for new ERP implementations and additions of new
modules?
What do you see as the main challenges to successful ERP implementations within your
organization?
QUESTIONS???
THANK
YOU!!