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Introduction to ERP:
Software solution that address the
enterprise needs taking the process
view of an organization to meet the
organizational goals tightly
integrating all functions of an
enterprise.
What Is an Enterprise?
Traditional approach:
Integrated approach.
Business Modeling :
Creating a business model is the first activity in any
ERP project
It is a representation of business as a large system,
showing the interconnections and interdependencies
of the various sub-systems and business processes.
5.
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9.
Money spent on ERP are well spent and the ERP system will pay for itself.
Evolution of ERP:
MRP
Manufacturing-centric/Push mgt.
Master production schedule
Final production schedule
Inventory management
Bill of materials
Gross requirement generation
Net requirement generation
Reorder point calculation
Automatic replenishment
MRP I I
ADVENT OF ERP
ERP came into being with effect from
1990. Though ERP existed from the
year 1960 in the form of MRP1 and
MRP2.
Infact MRP2 was more or less ERP
except for its inability to coordinate
departments other than marketing.
The whole period from the year 1960 is
denoted as the age of ERP.
The benefit of ERP was slowly felt from
this stage onwards.
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
Advantages of ERP:
1. Improved efficiency
2. Information integration for better decision making, flexibility
3. Faster response time to customer queries
4. Cost reduction
5. Better analysis and planning capability
6. As a base for future reforms
7. Simplification of Business Processes
8. Compliance and Control
9. Enable New Business and Growth strategies
10. Continuous Improvement
11. Extend your business using internet
Chapter 2
Issues in ERP
4.
5.
B) ERP Implementation:
Funct
Funct
Funct
Funct
Funct
Funct
Human Resources:
Types of Organizational
information Systems
Administrative systems
Scheduling / Transaction systems
Value oriented systems
Reporting and controlling systems
Analysis and information systems
Planning and decision support systems
(From Business Process Engineering by
A.W. Scheer)
Integration
Consolidation
Right-sizing
Business Process Redesign
Enterprise wide system
Integrated systems
or
Enterprise Resource Planning
System
ERP - Definition
ERP is a process of managing all
resources and their use in the entire
enterprise in a coordinated manner
What is ERP?
Enterprise Resource Planning
Support business through optimizing,
maintaining, and tracking business
functions
Broken down into business processes
HRM
Distribution
Financials
Manufacturing
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
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
Vendors
Difficulty in implementation
Very difficult
Extremely costly and time intensive
Typical: over $10,000,000 and over a
year to implement
Company may implement only
certain modules of entire ERP system
You will need an outside consultant
Common Pitfalls
Do not adequately benchmark
current state
Did not plan for major transformation
Did not have executive sponsorship
Did not adequately map out goals
and objectives
Highly customized systems to look
like old MRP systems
Survey of ERP
implementations
Done by ittoolbox.com in
2004
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