ERPIntroduction :

* The concept is used to address the resource planning requirement of the enterprise.

* ERP offers seamless integration of business Transactions based on information across various function in the organization.

ERP

Definition 

“Software solution that addresses the Enterprise needs, taking a process view of the overall organization to meet the goals,by tightly integrating all functions and under a common software platform” 

OR

ERP is a set of application Software that integrates information from manufacturing finance, distribution, & other business functions & facilitates Decision making.

Why ERP? •For Management – to know what is happening

in the company•  One solution for better Management •  For cycle time reduction •  To achieve cost control & low working capital •  Automatic Introduction to latest technologies •  To shun the geographical gaps •  To satisfy the customers with high expectations •  To be Competitive & for survival •Effective Solution for the Better Project Management•For Complete Integration of the System

Evolution of ERP 1960’s - Systems Just for Inventory Control  1970’s  - MRP – Material Requirement Planning     (Inventory with material planning & procurement) 

1980’s - MRP II – Manufacturing Resources Planning     (Extended MRP to shop floor & distribution Mgnt.) 

Mid 1990’s - ERP – Enterprise Resource Planning     (Covering all the activities of an Enterprise) 

2000 onwards – ERP II – Collaborative Commerce     (Extending ERP to external business entities)   

ERP 

 A typical ERP Package solution has the following Modules :-Sales, Marketing, Distribution-Manufacturing-Stores Management-Finance-Personnel-Maintenance-Purchase, Inventory-Planning & ControlThese Modules are designed for data capture, data transaction validation, its analysis, accounting, updation & reporting.

ERP – Functional Architecture  

   

ERP Database

Sales

Project

Accounting

Service

Quality Human Resource

Maintenance

Manufacturing

Materials

LogisticsDistribution

Fig : Functional Modules of ERP

ERP – Expectations  

Integrating all the functions  

  Integrating the systems running in all the locations  

  Transparency of information using a single     data source across the organization 

Software must be responsive

Modular   Flexible   Easy to add functionalities   Provide growth path  

ERP – Features

Major Features :- Company Wide Integrated Information System :

It covers all functional areas like Manufacturing, Selling & distribution, Payables, receivables, Inventory, accounts, Human Resources, Purchases etc.-Increase Customer services-Eliminates most of the business problems like material, shortage, productivity enhancement, customer services, cash management, inventory problems, quality problems etc.- ERP allows automatic introduction of latest technology like EFT, EDI, Internet, Intranet, Video Conferencing, E-commerce etc -It provides the opportunity of improving & refining business process.-ERP bridge the information gap across the organization- provides complete integration of systems.-It is Effective solution for better Project Management.

ERP – BASIC Features

Business System :-Business forecasting for products, Groups, & Markets-Target Fixing & Allocation -Business Planning in terms of the resources to execute

Sales:-Basic Data Management-Order Processing-Dispatching & invoicing-Order analysis ,forecasting-Sales analysis, budgeting & controls-Finished goods stores management-Market/Customer/Product analysis-Market research information database

ERP – BASIC FeaturesProduction :-Bill of Materials, classification-Process sheet, routing-Production planning

Materials:-Purchasing & procurement-Goods receipt-Stock management & valuation-Inventory analysis

Finance:-Ledger, payables & receivables-Loan Management, funds managementBudgeting planning & control

ERP – BASIC Features

Personnel :-personnel data management

-Personal attendance system, time management

-Planning, recruitment, training etc.

Other-fixed assets accounting : Inventory, register

-Maintenance

-Quality

ERP – Benefits Tangible Benefits These can be measured in one form or other * Reduction in Inventory Level * Improvement in Customer Service Level *Improvement in Purchasing Cost * Productivity Improvement

Intangible Benefits

These can not be qualified or Measured *Information Availability *System Maintainability•Reduction in Response Time•Improvement in Planning & Sales

ERP – Vendors

There are various ERP vendors, who are very active in the market. Some of the companies offering ERP products include:

-SAP -Marcarn

-Baan - Platinum

-Oracle -Software 2000

-PeopleSoft

-JD Edwards

-IBM

-CODA

 Just automating the existing business practiceswill not help ERP to achieve the anticipated resultsbecause, OO + NT = EOO 

Business Process Re-engineering [BPR] brings out thedeficiencies of the existing setup 

BPR and ERP will give way to implement newsystems and the long pending improvements in theexisting systems 

BPR may be time consuming but the scope can berestricted & controlled by the Management 

BPR & ERP 

BPR - Steps 

Automate 

Simplify/Improve 

Understand 

Implement with the help of ERP 

Draft & frame the possibilities & ways to simplify or Improve or eliminate the processes 

Understand the existing systems associated with all the functionalities 

OPTION 1 – MAKE [Using Internal resources] 

Developing a custom-built ERP package, specific to therequirements of the organization, with the help of thein-house IT department 

OPTION 2 - BUY 

Going for Tailor-made ERP packages available in the market likeSAP, Oracle applications, Baan, PeopleSoft etc. 

OPTION 3 – MAKE [using External resources] 

Developing a custom-built ERP package, specific to therequirements of the organization, with the help of a software solution provider  

ERP – Options  

ERP product selection

  Preparations

  Production

  Implementation

  Post-Implementation

Execution phases  

ERP Team formation for selection

  Appointment of Consultants [if needed]

  Scoping study

  Product selection

  Implementation partners selection

  Hardware/Communication cost estimation

ERP Product selection Phase 

Reputation of the ERP product

  No.of installations in the geographical vicinity

  % of the overall functional availability

  Customization possibilities

  After sales support

  Your investment plan & budget

  Implementation partner’s track record

 

Product Selection - Parameters  

 

Preparation Phase  

Framing ERP Implementation Strategies   Formation of Apex & Steering committees   Functional & IT team formation   Training on ERP functions & features   Scope finalization   GAP analysis   Action plan to resolve the gaps  

 

Production Phase  

Installing the software & hardware  Tuning the software to meet the      customization needs 

Master & Control data arrival as per      the Product data structures 

Location & people specific roles & rights      allocation for module access & security 

 

Implementation Phase  

Conference Room Pilot [Parallel run]  Resolving the Parallel run issues  Training the end users  Live run

 

Implementation Phase  

Conference Room Pilot [Parallel run] Resolving the Parallel run issues Training the end users Live run

Post-Implementation Phase 

*Regular monitoring *Tuning [hardware/software] for patching      the performance issues *Maintenance

 

Implementation Phase  

Conference Room Pilot [Parallel run] Resolving the Parallel run issues Training the end users Live run

Post-Implementation Phase 

*Regular monitoring *Tuning [hardware/software] for patching      the performance issues *Maintenance