Enterprise Resource Planning(ERP)

Enterprise Resource
Planning (ERP)
Presented By:
Makansingh Chauhan

Today We will be covering:
 What is ERP.?
 History/Evolution of ERP.
 Module/components of ERP.
 ERP Implementation and Selction.
 Advantage & Disadvantages of
ERP.
 Some Success Stories.
 Why ERP Fails?.
 Future of ERP.
 Conclusion.

ERP : Definition
 ERP is a set of integrated business
applications, or modules which carry out
common business functions such as general
ledger, accounting, or order management.
 IT software that integrates business activities
across an enterprise

What is ERP?
 ERP is short for enterprise resource
planning.
 An ERP system is an attempt to integrate all
functions across a company to a single
computer system that can serve all those
functions’ specific needs.
 Support business through optimizing,
maintaining, and tracking business functions.
 From product planning, parts purchasing,
inventory control, and product distribution, to
order tracking.

Evolution /History of ERP
1960’s - Systems Just for Inventory Control
1970’s - MRP – Material Requirement
Planning
(Inventory with material planning &
procurement),
MMAS-Material Management and Accounting
System.
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)

Components OF ERP!
 Accounting and Finance
• This gathers and manage financial data and financial
processes from various functional departments and
generates valuable financial reports such as balance
sheet, general ledger; trial balance and quarterly
financial statements.
 Human Resources
 This component maintains a employee database containing
information about employees contact information, salarydetails,
attendance, performance evaluation and promotion details.
 This component helps the management to make use of the
employees best talent.

Components OF ERP!
 Manufacturing
• This component provides the information needed
for the manufacturing process to take place.
• It contains number of manufacturing methods, so
that the organization can choose the best which
fits for them
• Bills of Material, Scheduling, Capacity, Workflow
Management, Quality Control, Cost Management,
Manufacturing Process, Manufacturing Projects,
Manufacturing Flow.

Projects Management
• Project management is the discipline of planning, organizing,
motivating, and controlling resources to achieve specific
goals.
• Costing, Billing, Time and Expense, Activity Management
 Customer Relationship Management
• Involves managing all aspects of a customer’s relationship
with an organization to increase customer loyalty and
retention and an organization’s profitability.
• Sales and Marketing, Commissions, Service,
Customer Contact and Call Center support.
Components OF ERP!

Components OF ERP!
 Supply Chain
Management
 Supply Chain Management
(SCM), sometimes referred
to as logistics, improves the
flow of materials through an
organization by managing
planning, scheduling,
procurement, and fulfillment,
to maximize customer
satisfaction and profitability.

ERP Vendors
 SAP - Systems Applications Products in
Data Processing
37.50% - Honda, IBM, Bank of Canada,P & G.
 Oracle - 10.50% - USPS, CBS, Nike, Kodak,
Toronto Dominion Bank

ERP Vendors
Peoplesoft - - 16.50% - NBA, Adidas, Anderson
Consulting, Hilton Hotels, NYNEX
 J.D. Edwards - 16.50% - Harley Davidson,
Saab Automobile, BellSouth Cellular
Corporation, Holiday Inns, Fox Television
Stations
 21% others.

Do you currently have
an ERP package?

ERP – Implementation Options
OPTION 1 – MAKE [Using Internal resources]
Developing a custom-built ERP package, specific to the
requirements of the organization, with the help of the
in-house IT department
OPTION 2 - BUY
Going for Tailor-made ERP packages available in the market like
SAP, Oracle applications, Baan, PeopleSoft etc.

Major Things for ERP Implementation :
 Flexibility of software system upgrades
 Availability of internal technical
knowledge and resources
 Education and training
 Need an outside consultant
 Implementation strategy and execution

ERP Selection
• Check whether all functional
aspects of your Business are
covered
• Check whether all the business
functions and processes are
integrated
• Check whether all latest IT
trends are covered
• Check whether the vendor has
customizing & implementing
capabilities
• Check the Service options
available
• Check your purse & calculate
ROI (Return On Investment)

Advantage of ERP
 Business Integration
 Improved customer service and order fulfillment
 Improved communication with suppliers and
customers.
 One common system - less duplication, more
efficient.
 Reduce inventory.
 Saves enormous time and effort in data entry.
 Improved business performance.

Disadvantages of ERP
 High Software cost
 Consulting Fees.
 Forced change of processes.
 Very complex software
 Lack of trained people
 Not Internet-ready

Success Stories
 Autodesk (computer aided design software
maker)
• Reduced delivery time from two weeks to less
than 24 hours
 IBM Storage Systems Division
• Reduced time to re-price – 5 days to 5 minutes
• Time to ship a replacement part – 22 to 3 days
• Time to complete a credit check – 20 minutes to 3
seconds

Success Stories
 Fujitsu Microelectronics
• Reduced the cycle time for filling orders –
from 18 days to 1.5 days
• Time to close financial books – from 8 to 4
days

 Systems can be very difficult to use.
 Software logic and the company strategy
may not match!
 Inadequate training to to end users.
Many companies cut costs by cutting
user training.
 ERP systems can be very expensive to
install.
Why ERP fails ?

ERP in Future !
 Internet – continue to help organizations integrate
data and process across functional departments
 Availability of web-based and wireless ERP systems
 Adoption of easy-to-install ERP systems
 Linkage to other software systems, e.g., supply chain
management system, e-commerce, customer
relationship management system.

Conclusion
 ERP is a key backbone application for companies in a fast
changing industry.
 The risks in an ERP implementation are usually outweighed by
the benefits.
 ERP is recommended in an organization not only because the
advantages outnumber the disadvantages but also by keeping
in mind the ways to overcome the disadvantages. An
organization has to correctly weigh the advantages and
disadvantages of ERP before going for them

"Excellence is not a skill.
It is an attitude."
Thank you :)

Enterprise Resource Planning(ERP)

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