Erp presentation

Presentation by;Presentation by;

Mr. Abhijeet ShettyMr. Abhijeet ShettyMs. Ragini MohiteMs. Ragini MohiteMr. Aashay KhawteMr. Aashay KhawteMr. Sagar ShirwaikarMr. Sagar ShirwaikarMr. Vinayak DhumatkarMr. Vinayak Dhumatkar

Date: 05Date: 05THTH AUGUST 2009 AUGUST 2009

5 August 20095 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)ICAI - GMCS (LLIM - Jul/Aug 09) 22

ContentsContents

• Introduction to ERPIntroduction to ERP

• Business Process Re-engineering Business Process Re-engineering (BPR)(BPR)

• ERP ImplementationERP Implementation

• Vendors of ERPVendors of ERP

• Business Modules in ERPBusiness Modules in ERP

• ERP & Role of Chartered AccountantsERP & Role of Chartered Accountants

• ConclusionConclusion


Why ERP ?Why ERP ?

To Survive ,Thrive And Beat The CompetitionTo Survive ,Thrive And Beat The Competition

Manage futureManage future

Manage InformationManage Information

Automation of the process of Data CollectionAutomation of the process of Data Collection

Information Technology (ERP Solution)Information Technology (ERP Solution)


History Of ERPHistory Of ERP

• ERP (Enterprise Resource ERP (Enterprise Resource Planning) is the evolution of Planning) is the evolution of Manufacturing Requirements Manufacturing Requirements Planning (MRP) II.Planning (MRP) II.

• From business perspective, ERP From business perspective, ERP has expanded from coordination has expanded from coordination of manufacturing processes to of manufacturing processes to the integration of enterprise-wide the integration of enterprise-wide backend processes.backend processes.

• From technological aspect, ERP From technological aspect, ERP has evolved from legacy has evolved from legacy implementation to more flexible implementation to more flexible tiered client-server architecture.tiered client-server architecture.


Timeline System Description1960s Inventory

Management & Control

It includes identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status.

1970s Material Requirement Planning (MRP)

MRP utilizes software applications for scheduling production processes. MRP generates schedules for the operations and raw material purchases.

1980s Manufacturing Requirements Planning (MRP II)

Manufacturing Requirements Planning or MRP utilizes software applications for coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution.

1990s Enterprise Resource Planning (ERP)

ERP was introduced by Research & Analysis by Gartner in 1990. ERP systems integrate business activities across functional departments, from product planning, parts purchasing, inventory control, product distribution, fulfillment, to order tracking. ERP software systems may include application modules for supporting marketing, finance, accounting and human resources.


What is ERP ?What is ERP ?

• ENTERPRISEENTERPRISE: : An enterprise is a group of people with a common goal, which has An enterprise is a group of people with a common goal, which has certain resources at its disposal to achieve that goal.certain resources at its disposal to achieve that goal.

• RESOURCERESOURCE: : Resources included are money, man-power, materials, and all other Resources included are money, man-power, materials, and all other things that are required to run the enterprise.things that are required to run the enterprise.

• PLANNINGPLANNING:: Planning is done to ensure that nothing goes wrong. Planning is Planning is done to ensure that nothing goes wrong. Planning is putting necessary functions in place and more importantly, putting putting necessary functions in place and more importantly, putting them together.them together.

• ERP covers the techniques and concepts employed for the integrated ERP covers the techniques and concepts employed for the integrated management of business as a whole, from the viewpoint of the management of business as a whole, from the viewpoint of the effective use of management resources, to improve the efficiency of effective use of management resources, to improve the efficiency of an enterprise. an enterprise.


Features of ERPFeatures of ERP

• Integrates Business Operations.Integrates Business Operations.

• Library of Business Process.Library of Business Process.

• Real Time updating of transactions.Real Time updating of transactions.

• Multi-Tasking & Multi-Currency Features.Multi-Tasking & Multi-Currency Features.

• Easy Web Enablement Features.Easy Web Enablement Features.

• Supports - Alert facilities, data warehouse & OLAP.Supports - Alert facilities, data warehouse & OLAP.

• Integration of Workflow Management.Integration of Workflow Management.


Industry wise Uses of Industry wise Uses of ERP…..ERP…..• ManufacturingManufacturing

• SoftwareSoftware

• InsuranceInsurance

• HealthcareHealthcare

• HospitalityHospitality


ERP: AdvantagesERP: Advantages• Reduction of lead-time.Reduction of lead-time.

• Reduction in cycle time.Reduction in cycle time.

• Better customer satisfaction.Better customer satisfaction.

• Improved supplier performance.Improved supplier performance.

• Increased flexibility.Increased flexibility.

• Reduction in quality costs.Reduction in quality costs.

• Improved resource utility.Improved resource utility.

• Improved information accuracy Improved information accuracy and decision-making capability.and decision-making capability.


ERP: DisadvantagesERP: Disadvantages

• Lack of clarity of expectations from ERP.Lack of clarity of expectations from ERP.

• Unreasonable scope & Inadequate Resources.Unreasonable scope & Inadequate Resources.

• Choice of wrong ERP product – not all products are suitable for Choice of wrong ERP product – not all products are suitable for all industries.all industries.

• Not choosing the right people for implementation.Not choosing the right people for implementation.

• Lack of participation of end-users.Lack of participation of end-users.

• Lack of proper communication within the organization.Lack of proper communication within the organization.


Introduction to BPRIntroduction to BPR• Business process reengineering (BPR)Business process reengineering (BPR)

is, in computer science and management, an is, in computer science and management, an

approach aiming at improvements by means approach aiming at improvements by means

of elevating efficiency and effectiveness of of elevating efficiency and effectiveness of

the business process that exist within and the business process that exist within and

across organizations. The key to BPR is for across organizations. The key to BPR is for

organizations to look at their business organizations to look at their business

processes from a "clean slate" perspective processes from a "clean slate" perspective

and determine how they can best construct and determine how they can best construct

these processes to improve how they these processes to improve how they

conduct business.conduct business.


Definitions of BPRDefinitions of BPRThomas H. Davenport (1993)Thomas H. Davenport (1993)

• "encompasses the envisioning of new work "encompasses the envisioning of new work strategies, the actual process design strategies, the actual process design activity, and the implementation of the activity, and the implementation of the change in all its complex technological, change in all its complex technological, human, and organizational dimensions." human, and organizational dimensions."

Hammer and Champy (1993)Hammer and Champy (1993)

• "... the fundamental rethinking and radical "... the fundamental rethinking and radical redesign of business processes to achieve redesign of business processes to achieve dramatic improvements in critical dramatic improvements in critical contemporary measures of performance, contemporary measures of performance, such as cost, quality, service, and speed." such as cost, quality, service, and speed."


Benefits of BPRBenefits of BPR

• Business process is streamlinedBusiness process is streamlined

• Business process is optimized and more efficientBusiness process is optimized and more efficient

• Strict controls can be enforced and monitored.Strict controls can be enforced and monitored.

• Best practices can be adhered to.Best practices can be adhered to.

• Time and cost saving as a result of eliminated redundant Time and cost saving as a result of eliminated redundant tasks. tasks.


Principles of BPRPrinciples of BPR• Focus on the Right ProcessesFocus on the Right Processes

• Voice of the CustomerVoice of the Customer

• Managing ChangeManaging Change

• Active ParticipationActive Participation

• Targets and Performance MeasureTargets and Performance Measure

• IntegrationIntegration

• FlexibilityFlexibility

• Project ManagementProject Management


Conclusion of BPRConclusion of BPR

““The onus of the successful The onus of the successful implementation lies with the implementation lies with the

Organization”Organization”

To be successful, business process reengineering projects To be successful, business process reengineering projects need to be top down, taking in the complete organization, need to be top down, taking in the complete organization, and the full end to end processes. It needs to be supported and the full end to end processes. It needs to be supported by tools that make processes easy to track and analyze.by tools that make processes easy to track and analyze.


ERP Implementation And ERP Implementation And MethodologyMethodology

• ERP implementation is a special eventERP implementation is a special event

• Consultants and Users Should Work TogetherConsultants and Users Should Work Together

• Improve The Flow of InformationImprove The Flow of Information

• CustomizationCustomization


Steps in ERP ImplementationSteps in ERP Implementation• Identifying the needs for implementing an ERP packageIdentifying the needs for implementing an ERP package • Evaluating the ‘As is’ situation of the businessEvaluating the ‘As is’ situation of the business • Deciding the ‘would be’ situation of the businessDeciding the ‘would be’ situation of the business • Reengineering the business process to achieve the desired Reengineering the business process to achieve the desired

results in the existing processesresults in the existing processes

• Evaluating the various available ERP packagesEvaluating the various available ERP packages • Finalizing the most suitable ERP packagesFinalizing the most suitable ERP packages • Installing the required hardware & networks for selected Installing the required hardware & networks for selected

ERPERP • Finalizing the implementation consultants who will assist Finalizing the implementation consultants who will assist

in implementationin implementation

• Implementing the ERP packagesImplementing the ERP packages

Vendors of ERP Package

• Oracle corporation– Oracle is one of the top players in the ERP market– Oracle Manufacturing Applications offers internet

enabled, network centric computing – As a one stop shop, it offers the database, tools,

implementation, applications and UNIX operating systems running on a wide choice of hardware

• SAP AG– SAP is the world's second largest business software

company.– SAP focuses on six industry sectors: process industries,

discrete industries, consumer industries, service industries, financial services, and public services

– SAP matches business processes to modules.


Vendors of ERP Package (Contd.)

•Baan– It addresses manufacturers from largest global players to

smallest ERP user.– It offers tools for Business Process Analysis– It uses 4GL language

•SSA– BPCS was developed by System Software Associates (SSA) – It is used in manufacturing companies– It offers functionality of Process and Kanban Manufacturing


Vendors of ERP Package (Contd.)

•Sage Group plc– It is engaged in the development, distribution and

support of business Management software– Accpac is a vendor of accounting, Customer relationship

management and business management software– It has two main product lines

• Sage Accpac ERP

• Sage Pro ERP



Major Modules in ERP Major Modules in ERP PackagesPackages

• Finance ModuleFinance Module

• HR ModuleHR Module

• Manufacturing ModuleManufacturing Module

• Material Management Material Management (MM) Module(MM) Module

• Sales & Distribution Sales & Distribution ModuleModule

SALES & DISTRIBUTION MANAGEMENT

LOGISTICS&

CUSTOMER SERVICE MANAGEMENT


Finance ModuleFinance Module

• Finance functionality for organizations whose Finance functionality for organizations whose business is spread over the world.business is spread over the world.

• Company wide control & Integration of Financial Company wide control & Integration of Financial Information.Information.

• Sub Systems are :Sub Systems are :– Financial AccountingFinancial Accounting– TreasuryTreasury– ControlControl– Enterprise ManagementEnterprise Management


Human Resource ModuleHuman Resource Module

• HR is an essential factor of any successful business. This HR is an essential factor of any successful business. This Module offer company wide solutions for HR departments Module offer company wide solutions for HR departments and make it possible for authorized users of the other and make it possible for authorized users of the other departments to access specific employee data. departments to access specific employee data. – Personnel AdministrationPersonnel Administration– Employee Master DataEmployee Master Data– Recruitment ManagementRecruitment Management– Open PositionsOpen Positions– Selection & HiringSelection & Hiring– Travel ManagementTravel Management– Personnel cost planningPersonnel cost planning


Manufacturing ModuleManufacturing Module

• Components of Manufacturing Module :Components of Manufacturing Module :

– Material & Capacity PlanningMaterial & Capacity Planning

– Quality ManagementQuality Management

– Cost ManagementCost Management

– Shop Floor ControlShop Floor Control


Material Management Material Management ModuleModule• It supports all phases of Material - Management, planning, It supports all phases of Material - Management, planning,

control, purchasing, receiving, inventory management & bill control, purchasing, receiving, inventory management & bill payment. Its sub-modules are :payment. Its sub-modules are :

– Pre Purchasing ActivitiesPre Purchasing Activities

– PurchasingPurchasing

– Vendor EvaluationVendor Evaluation

– Inventory ManagementInventory Management

– Invoice VerificationInvoice Verification


Sales & Distribution ModuleSales & Distribution ModuleOffers access to real-time, online information from sales to billing.Offers access to real-time, online information from sales to billing.Sub-systems in this modules are –Sub-systems in this modules are –

• Masters Data ManagementMasters Data Management

• Order ManagementOrder Management

• Warehouse ManagementWarehouse Management

• DispatchDispatch

• InvoicingInvoicing

• PricingPricing

• Sales SupportSales Support

• TransportationTransportation


Role of Chartered Role of Chartered Accountants in ERPAccountants in ERP

• How does ERP matter Chartered Accountants?How does ERP matter Chartered Accountants?

• Rapidly changing & challenging business world and Rapidly changing & challenging business world and automation of processes automation of processes

• ERP helps the organization to realize its vision and ERP helps the organization to realize its vision and objectives in an optimized way. objectives in an optimized way.

• Role as consultants, auditors, advisors or managers in Role as consultants, auditors, advisors or managers in controlling, managing and supporting the business.controlling, managing and supporting the business.


Major Challenges in ERP Major Challenges in ERP AuditsAudits• Complexity of ERPComplexity of ERP

• ManpowerManpower

• Inadequate Attention towards Inadequate Attention towards security of Systemssecurity of Systems


ConclusionConclusion

““A Chartered Accountant A Chartered Accountant without the knowledge of without the knowledge of ERP may feel as if he is a ERP may feel as if he is a fish out of the bowl”fish out of the bowl”


BibliographyBibliography

• www.erpwire.comwww.erpwire.com

• www.en.wikipedia.orgwww.en.wikipedia.org

• www.icai.orgwww.icai.org

• www.teamtechnology.co.ukwww.teamtechnology.co.uk

• ICAI – Reference Books & Study Material.ICAI – Reference Books & Study Material.


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