We have to learn ERP because in future if we get to develop an ERP module or work on it, then we must understand the business needs that it is trying to fulfill.
When we clearly understand the functioning of a department in an enterprise, then we will be able to develop a module to automate it.
We also need to understand the interaction between modules.
4. 1. Calculation systems
1950-80
Single purpose
Eliminate tedious human work
Examples: Payroll, General ledger, Inventory
Technology used: Mainframes, magnetic tapes,
batch processing
5. 2. Functional systems
1975-20?? (till date)
Use computers to improve operations
Applications: Human resources, order entry,
manufacturing resource planning
Technologies: Mainframes, PC’s, LAN’s
Typically contained within a department
Islands of automation
Applications independently developed and deployed
Driving force: availability of mini-computers
6. Functional system applications
Human resources System
Accounting and finance systems
Sales and marketing System
Operations management System
Manufacturing Systems
7. Problems with function based application
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
8. Solution to disparate systems ?
Integration
Consolidation
Right-sizing
Business Process Redesign
Enterprise wide system
9. 3) Integrated systems
Integrated systems or Enterprise Resource Planning
System
“ ERP is a process of managing all resources and their
use in the entire enterprise in a coordinated manner”.
“ ERP systems is a set of integrated business
applications, or modules which carry out common
business functions such as general ledger, accounting, or
order management”.
10. What is ERP?
Enterprise Resource Planning
Support business through optimizing,
maintaining, and tracking business functions
Broken down into business processes
HRM
Distribution
Financials
Manufacturing
11. 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
14. WHY AN ERP SYSTEM?
The new trend or ‘buzz word’
Too many different systems – complex to
maintain
Current systems not adequate
Business is growing and needs restructure
15. FACTORS TO CONSIDER IN SELECTION OF THE ERP SYSTEM
The organisation’s functional requirements
Packaged software vs. developed software debate
Identification of packages that can fit the needs of the
organisation
Assessment of fit between needs and attributes of the
ERP package
The organization readiness for ERP implementation
16. SEVEN IMPORTANT ERP PACKAGE
ATTRIBUTES TO CONSIDER:
Functionality
Reliability/ stability
Cost
Ease of use
Ease of customization
Ease of implementation
Vendor reputation
History – customer references
Available resources
ERP product knowledge, industry knowledge, business
knowledge
17. IMPORTANT READINESS FACTORS
Structured ERP implementation strategy
Alignment of internal strategy with ERP vendor ‘s
implementation strategy
Internal Project Planning
Committed project coordinators
Team dynamics
Communication lines
Business Process Engineering and Re-engineering
Change Management Plan
Personnel skills requirements analysis
skills development
Organisational structure evaluation and optimisation
18. IMPORTANT FACTORS FOR ERP SELECTIONSS
Functional Requirements
Packaged vs. Developed solution
Identification of packages (ERP systems) that could fit with functional
requirements
Assessment of fit with functional requirements. 7 criteria to consider:
• Functionality
• Reliability/stability
• Cost
• Ease of use
• Ease of customization
• Ease of implementation
• Vendor Reputation
20. What is ERP does?
ERP module corresponding to every department
in the enterprise.
With these module ERP manager and coordinate
all the resources, information and function of a
business from shared data stored.
ERP provides a platform for communication and
information exchange between various
departments of the organization.
ERP makes this task easier.
21. How ERP implemented?
ERP is implemented either on a single server or be distributed across
modular hardware or software.
When ERP is distributed across many systems, the different modules
communicated with each other over LAN.
ERP uses centralized database and utilize common computing platform.
ERP system platform all business operation on a uniform and enterprise
wide system environment.
The time required to implement an ERP system depend on the size of
business, number of module, the extent of customization, the scope of
the change and the willingness of the customer to take ownership for
the project.
ERP systems are modular, so they don’t all need be implemented at
once.
The most important activity in successful implementation of ERP is
data migration i.e. transferring data to the ERP system.
22. Module in ERP
Finance
Sales and distribution
Manufacturing
Human resource management
Plant maintenance
Quality management
Materials management
23. Importance of ERP
ERP is very important in order fulfillment process of a
company. For the reason, it is also referred to as back-office
software.
It doesn’t handle the upfront selling process. But it
takes a customer order and provides a software roadmap of
automating the different step along the path to fulfilling it.
We can say that an ERP system gives all information
required to complete the order for example. Customer credit
rating and order history from the finance module, the
company inventory levels from the warehouse module and
the shipping dock’s trucking schedule from the logistic
module.
24. Benefits of ERP
Common set of data
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
A way to force BPR (reengineering)
Easy way to solve Y2K problem
25. Advantage of ERP
ERP allows easier global integration (barriers of currency),
exchange rates, language and culture can be bridged
automatically.
Update only need to be done once to be implemented company
wide.
Provide real time information reducing the possibility of
redundancy errors.
Creates a more efficient work environment making it easier for
employee to do their job which leads to effectiveness.
Vendors have past knowledge and expertise on how to best build
and implement a system.
26. Why learn ERP?
We have to learn ERP because in future if we get to
develop an ERP module or work on it, then we must
understand the business needs that it is trying to fulfill.
When we clearly understand the functioning of a
department in an enterprise, then we will be able to
develop a module to automate it.
We also need to understand the interaction between
modules.
27. Summary
ERP is companywide computer wide computer software system
used to manage and coordinate all the resources, information and
function of a business from shared data stored.
ERP is a software package consisting of various modules.
Each ERP module corresponds to a department in an enterprise.
ERP facilitates inter department communication within an
enterprise.
ERP works on a centralized database. Information in this
database is available to the entire department and can also be
updated by them.