What is ERP

Enterprise Resource Planning

ERP - Definition

An information system or process integrating all manufacturing and related applications for an entire enterprise.

ERP systems permit organizations to manage resources across the enterprise and completely integrate all functional and manufacturing systems.

ERP Solutions

ERP solutions seek to streamline and integrate operation processes and information flows in the company to synergise the resources of an organisation namely men, material, money and machine through information.

Agenda
Evolution of ERP Need for ERP Features of ERP Components of ERP BPR & ERP Selection of ERP Implementation Steps and Phases of ERP Benefits of ERP Well Known ERP Systems

Evolution of ERP
In the ever growing business environment the following demands are placed on the industry :

o Aggressive Cost control initiatives o Need to analyze costs / revenues on a product or customer basis o Flexibility to respond to changing business requirements o More informed management decision making o Changes in ways of doing business o Difficulty in getting accurate data, timely information and improper interface of the complex natured business functions

Evolution of ERP
Diverse applications and planning systems have been introduced into the business world for crossing these hurdles and for achieving the required growth. They are:

Management Information Systems (MIS) Integrated Information Systems (IIS) Executive Information Systems (EIS) Corporate Information Systems (CIS) Enterprise Wide Systems (EWS) Material Resource Planning (MRP) Manufacturing Resource Planning (MRP II) Money Resource Planning (MRP III)

OUT OF ABOVE SYSTEMS ERP EVOLVED AS THE LATEST SYSTEM FOR ALL BUSINES SYSTEMS

Need for ERP

In a rapidly changing environment,

it is impossible to create and maintain a custom designed software package which will cater to all their business requirements. and also be completely up-to-date.

Realizing the requirement of user organizations some of the leading software companies have designed Enterprise Resource Planning software which will offer an integrated software solution to all the functions of an organisation.

Features of ERP
o ERP facilitates company-wide Integrated Information System covering all functional areas like Manufacturing, Selling and distribution, Payables, Receivables, Inventory, Accounts, Human resources, Purchases etc.

o ERP performs core Corporate activities and increases customer service and thereby augmenting the Corporate Image.

o ERP bridges the information gap across the organisation.

o ERP provides for complete integration of Systems not only across the departments in a company but also across the companies under the same management.

o ERP is the only solution for better Project Management.

Features of ERP
o ERP allows automatic introduction of latest technologies like Electronic Fund Transfer(EFT), Electronic Data Interchange(EDI), Internet, Intranet, Video conferencing, ECommerce, RFID, Bar Coding etc. o ERP eliminates the most of the business problems like Material shortages, Productivity enhancements, Customer service, Cash Management, Inventory problems, Quality problems, Prompt delivery etc. o ERP not only addresses the current requirements of the company but also provides the opportunity of continually improving and refining business processes. o ERP provides business intelligence tools like Decision Support Systems (DSS), Executive Information System (EIS), Reporting, Data Mining and Early Warning Systems (Robots) for enabling people to make better decisions and thus improve their business processes

Components of ERP
To enable the easy handling of the system the ERP has been divided into the following Core subsystems:

o o o o o o o o o o o

Sales and Marketing Master Scheduling Material Requirement Planning Capacity Requirement Planning Bill of Materials Purchasing Shop floor control Accounts Payable/Receivable Logistics Asset Management Financial Accounting

The Integrated Supply Chain

Integeration Of Information Systems

BPR and ERP

Business Process Re-engineering is a pre-requisite for going ahead with a powerful planning tool like ERP.

An in depth BPR study has to be done before taking up ERP. Business Process Re-engineering brings out deficiencies of the existing system and attempts to maximize productivity through restructuring and re-organizing the human resources as well as divisions and departments in the organisation

Business Process Engineering evolves the following Steps: o Study the current system o Design and develop new systems o Define Process, organisation structure and procedure o Develop customize the software o Train people o Implement new system The principle followed for BRP may be defined as USA Principle (Understand, Simplify Automate)

THE USA PRINCIPAL

A Model Design

How do We Start For ERP

Selection of ERP
Evaluation and selection an ERP involves checking :-

o All functional aspects of the Business are duly covered o All the business functions and processes are fully integrated o All the latest IT trends are covered o o The vendor has customizing and implementing capabilities The business can absorb the cost The ROI is optimum

Implementation Steps of ERP

The normal steps involved in implementation of an ERP are - below:
o Project Planning o Business & Operational analysis including Gap analysis o Business Process Reengineering o Installation and configuration o Project team training o Business Requirement mapping o Module configuration o System interfaces o Data conversion o Custom Documentation o End user training o Acceptance testing o Post implementation/Audit support

Implementation Phases of ERP The above steps are grouped and subdivided into four major phases namely 1) Detailed discussions, 2) Design & Customisation, 3) Implementation 4) Production.

Phase Tasks and Deliverables

1. Detailed Discussion Phase: Task : Project initialization Evaluation of current processes, business practices Set-up project organization

Deliverables : Accepted norms and Conditions Project Organisation chart Identity work teams

Phase Tasks and Deliverables

2. Design and customisation Phase: Task : Map organisation Map business process Define functions and processes ERP software configuration and Build ERP system modifications.

Deliverables : Organisation structure Design specification Process Flow Diagrams Function Model Configuration recording System modification.

Phase Tasks and Deliverables

3. Implementation Phase: Task : Create go-live plan and documentation Integrate applications Test the ERP customisation Train users

Deliverables : Testing environment report Customisation Test Report Implementation report

Phase Tasks and Deliverables

4. Production Phase: Task: Run Trial Production Maintain Systems

Deliverables: Reconciliation reports Conversion Plan Execution

Advantages Of ERP Package

Zero Downtime

Benefits of ERP
o Increased control of invoicing and payment processing and thereby boosting productivity and eliminating reliance on computer personnel for these operations. o Reduce paper documents by providing on-line formats for quickly entering and retrieving information. o Improves timeliness of information by permitting, posting daily instead of monthly. o Greater accuracy of information with detailed content, better presentation. o Improved Cost Control o Faster response and follow up on customers o More efficient cash collection, say, material reduction in delay in payments by customers. o Better monitoring and quicker resolution of queries.

Benefits of ERP
o Enables quick response to change in business operations and market conditions. o Helps to achieve competitive advantage by improving business process. o Improves supply-demand linkage with remote locations and branches in different countries. o Provides a unified customer database usable by all applications. o Improves International operations by supporting a variety of tax structures, invoicing schemes, multiple currencies, multiple period accounting and languages o Improves information access and management throughout the enterprise. o Provides solution for problems like Y2K and Single Monitory Unit(SMU)

Summary

LEADING ERPs

Some Well Known ERP Systems

o Baan o CODA o IBM o JD Edwards o Marcarn o Oracle o People soft o Ramco o SAP o Software 2000

Thank You