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  1. 1. What is ERP?  Software solution that addresses all the needs of an enterprise and integrates all the functions of the enterprise. Finance Manufacturing Warehouse HR Computer System Computer System Computer System Computer System Single System Individual Department Systems Integration through ERP software
  2. 2. Life Cycle of ERP Common examples includeCommon examples include SAP, PeopleSoft, Baan andSAP, PeopleSoft, Baan and OracleOracle.. Needs Assessment Software Selection Process Reengineering Conference Room Pilot Training Phased Implementation
  3. 3. What drives ERP ? • Business issues • Low Customer Satisfaction • Business Development - new areas, products, services • Ability to face competition • IT issues • Present Software does not meet business needs • Obsolete hardware/software difficult to maintain
  4. 4. Advantages • Facilitates Company-wide integrated Information Systems Covering all functional Areas. • Performs core Corporate activities and increases customer service augmenting Corporate Image. • Organizes & Optimizes the data input methodologies systematically.
  5. 5. 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) EnterpriseResourcePlanning
  6. 6. The USA Principle • Understand, Simplify, Automate Understand Existing Practices Simplify Processes by Eliminating waste Automate the Process EDI ERP Eliminating Combining Rearranging Diagramming Brain storming
  7. 7. 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. EnterpriseResourcePlanning
  8. 8. Choose! Inhouse Development OR ERP package Project Development takes time . Ready made Projects. Reinventing the wheel. Needs only customization Process specific to your industry Best Business practices followed are implemented Documentation may not be present Documentation is part of system EDI implementation modifications EDI Compatible. Universally accepted to be taken care of Enterprise implementation is The package itself is designed as difficult as each unit follows Enterprise Package. different S/W option Latest Developments to be studied Constant Updates on Technology as and when they are introduced. and Processes assured
  9. 9. Modules in ERP • Manufacturing – Engineering, Bills of Material, Scheduling, Capacity, Workflow Management, Quality Control, Cost Management, Manufacturing Process, Manufacturing Projects, Manufacturing Flow • Supply Chain Management – Inventory, Order Entry, Purchasing, Product Configurator, Supply Chain Planning, Supplier Scheduling, Inspection of goods, Claim Processing, Commission Calculation
  10. 10. • Financials – General Ledger, Cash Management, Accounts Payable, Accounts Receivable, Fixed Assets • Projects – Costing, Billing, Time and Expense, Activity Management • Human Resources – Human Resources, Payroll, Training, Time & Attendance, Benefits • Customer Relationship Management – Sales and Marketing, Commissions, Service, Customer Contact and Call Center support
  11. 11. 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
  12. 12. • Determine the hardware required • Fine tune the processes to be in line with those of ERP defined • Take Commitment from Management • Implement Step-by-step rather than big-bang introduction Consider and Implement!
  13. 13. • The system can suffer from the "weakest link" problem - an inefficiency in one department or at one of the partners may affect other participants. • Resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software. • 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 ?
  14. 14. • ERP vendors can charge sums of money for annual license renewal that is unrelated to the size of the company using the ERP or its profitability. • Technical support personnel often give replies to callers that are inappropriate for the caller's corporate structure. • ERP systems find it difficult to adapt to the specific workflow and business process of some companies - this is cited as one of the main causes of their failure. • Systems can be very difficult to use Why ERP fails ?