ERP Book Excerpts by Prof Jyotindra Zaveri

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The book on ERP by Prof. Jyotindra Zaveri presents in a very lucid way and simple language various aspects of ERP. Especially he has highlighted seamless integration of business processes in ERP by using more than 300 diagrams / pictures / tables and giving practical case-studies and examples from purchase, accounts, exports, material management, HR and all departments, which has increased its usefulness and value. Anybody working in ERP system will get all practical hints and guidelines regarding what, why, where, when and why of ERP.

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ERP Book Excerpts by Prof Jyotindra Zaveri

  1. 1. ERP Book Excerpts – Second Edition July 2012ENTERPRISE RESOURCE PLANNING PROF. Jyotindra Zaveri IT Consultant and Trainer Pune, India Second Edition: 2012 Himalaya Publishing House Page 2 of 400
  2. 2. ERP Book Excerpts – Second Edition July 2012Copyright © 2007-2015 Zaveri Jyotindra. All rights reserved. No part of this bookmay be reproduced, translated, converted into audio-video media, stored in aretrieval system or transmitted in any form or by any means electronic,mechanical, photocopying, recording, or otherwise without the prior writtenpermission of Prof. Zaveri Jyotindra.Permission may be sought directly from Prof. Zaveri. Email j.zaveri@dnserp.com .The export rights of this book are vested with Prof. Zaveri Jyotindra.The DNS ERP Software is registered with the government of India and copyright lawprotects the same. Any use of unauthorized source or DNS software is illegal. All rights arereserved with Prof. Zaveri Jyotindra for the DNS ERP computer program.Limits of liability and disclaimer of warranty:Notice: The author and publisher of this book have tried best to ensure that the programs,procedures, and functions described in the book are correct. However, the author andpublishers make no warranty of any kind, expressed or implied, with regard to theseprograms or documentation contained in this ERP book. The author and publisher shall notbe liable in any event of any damages, incidental or consequential, in connection with, orarising of the furnishing, performance or use of the ERP software package, procedures, andfunctions. Product name mentioned are used for identification purposes only and may betrademarks of their respective companies. All trademarks referred to in the book areacknowledged as properties of their respective owners.No responsibility is assumed by the author for any damage to persons or property as matterof products liability, negligence or otherwise, or from any use or operations of any methods,instructions, or ideas contained in the material herein. Because of rapid advances in theInformation Technology and business challenges, independent verification of methodsshould be made.The author has used its best endeavors to ensure that any URLs for websites referred to inthis ERP book are correct and active at the time of going to press. However, the author orpublishers has no responsibility for the websites and can make no guarantee that a site willremain live or that the content is or will remain relevant.First edition : 2009Second edition: 2012Published by Himalaya Publishing House Pvt. Ltd., India. Page 3 of 400
  3. 3. ERP Book Excerpts – Second Edition July 2012 This ERP book is available from: Himalaya Publishing House Pvt. Ltd. Offices as followsMumbai Head OfficeAnuj Pandey, Niraj Pandey, K N Pandey, D I R E C T O R SHimalaya Publishing House Pvt. LtdRamdoot, Dr. Bhalerao Marg, Girgaon,Mumbai - 400 004, Maharashtra, IndiaTel : (91) (22) 23863863 / 23860170Fax : (91) (22) 23877178S K Srivastava,Sales ManagerEmail : srivastavask@himpub.comEmail : himpub@vsnl.comWebsite : www.himpub.comRegional OfficesNew DelhiSudhir Joshi, Director,Vijay Rawat, Regional Manager"Pooja Apartments",4-B Murari Lal Street,Ansari Road, Darya Ganj,New Delhi - 110 002, IndiaTel : (91) (011) 23270392, 23278631Email : hphdel@yahoo.co.in BengaluruVijay Pandey, Regional ManagerNo 16/1 (Old 12/1), 1st Floor,Next to Hotel Highlands,Madhava Nagar, Race Course Road,Bengaluru - 560001Tel : (91) (080) 22281541, 22385461Fax : (91) (080) 22286611Email : hphblr@vsnl.comHyderabadKrishna Poojari, Regional ManagerNo-3-4-184,Lingampally,Besides Raghavendra Swamy Matham,Kachiguda,Hyderabad - 500027Tel : (91) (040) 27550139Email : hphhyd@hotmail.comChennaiYeshwant Rao, Regional ManagerHimalaya Publishing House Pvt. Ltd.No. 8/2, Madley 2nd Street, Ground Floor, T.Nagar,Chennai - 600 017Tel : (91) (044) 32463737, 09380460419, 09345345051 Page 4 of 400
  4. 4. ERP Book Excerpts – Second Edition July 2012Email : Chennai@himpub.comNagpurG N Pandey, DirectorKundanlal Chandak Industrial Estate,Ghat Road,Nagpur - 440 018Tel : (91) (0712) 2738731, 3296733Fax : (91) (0712) 2721215Email : Nagpur@himpub.comErnakulamK Sivadasan, Regional Manager39/176 (New No: 60/251) 1ST Floor,Karikkamuri Road,Ernakulam, Kochi - 682011KeralaTel : (91) (0484) 2378012, 2378016Email : ernakulam@himpub.comLucknowHouse No. 731, Sekhupuram Colony ,Near B.D. Convent SchoolLucknow 226 024Tel : (91) (0522) 2339329, 4068914Email : lucknow@himpub.comPuneK Surendra, Regional ManagerFirst Floor, "Laksh" Apartment,No. 527, Mehunpura, Shaniwarpeth,(Near Prabhat Theatre),Pune - 411 030.Tel : (91) (020) 24496323, 24496333, 3232 6733Fax : (91) (020) 2449 6333Email : surendra@himpub.comOrissaBijoy Ojha, Regional ManagerHimalaya Publishing House Pvt. Ltd.,5 Station Square,Bhubaneshwar,Orissa- 751001.Tel : 0674-2532129, /(M) 9861046007Email : bijoyojha@himpub.comAhmedabadNagendra Acharya, Regional ManagerNo. 114, Shail, 1st Floor,Opp. Madhu Sudan House,C. G. Road, Navrang Pura,Ahmedabad - 380009, GujaratTel : (91) (079) 26560126Email : naganderacharya@himpub.com Page 5 of 400
  5. 5. ERP Book Excerpts – Second Edition July 2012IndoreS K SrivastavaSales ManagerShyam Singh ThakurSales ExecutiveKesardeep Avenue Extension,73, Narayan Bagh, Flat No. 302,3rd Floor, Near Humpty Dumpty School, Narayan Bagh,Indore - 452007, MPTel : 09301386468Email : srivastavask@himpub.comKolkataN K MitraRegional Manager108/4, Beliaghata Main Road,Near ID Hospital, Opp. SBI Bank,Kolkata - 700010.Tel : 033-32449649Email : kolkata@himpub.comBhopalS K SrivastavaSales ManagerEmail : srivastavask@himpub.comTel : 07498213322GuwahatiHimalaya Publishing House Pvt. Ltd.House NO. 15Behind Pragjyotish CollegeNear Sharma Printing PressP. O. Bharalumukh, Guwahati 781009.(Assam) Page 6 of 400
  6. 6. ERP Book Excerpts – Second Edition July 2012 ForewordDear Mr. Jyotindra Zaveri,I read carefully, and with keen interest your book on “Enterprise Resource Planning” sopainstakingly written by you. It throws a new light on the concept of Enterprise ResourcePlanning and would be of great help to senior Managers as well as academicians. It coversall the aspects of Enterprise Resource Planning (ERP) and therefore, would be a greatsource of guidance to the readers concerned. This is a first ever kind of book I have comeacross written in a scientific manner and presenting the same in a lucid and simplelanguage.ERP as a concept and as a business process model is of recent development. You havewritten the book specifically for the functional managers targeting the SME sector (Smalland Medium size Enterprises). This book exhaustively covers different modules in theindustries and actual data entry screens, reports, master files of the business processes andsufficient case studies to understand the ERP in practice. You have wonderful track recordof rich and vast experience and knowledge of India and abroad.You have amply demonstrated it in the book. The book can be definitely used by businessschools as a reference book for ERP. It is useful to corporate to follow the steps given byyou in order to reap the benefits of ERP in their organization. The chapter regarding theHumor is an interesting addition to the book not to be found commonly in such referencebooks.I would certainly like everyone concerned to use this book for reference purposes.Please accept my appreciation and congratulations for writing this book on a valuablesubject.Regards, Dr. P. C. Shejwalkar, Director – IME, President ASM. Ex –Dean Faculty of Management & Professor Emeritus of Commerce & Management Sciences, University of Pune. Page 7 of 400
  7. 7. ERP Book Excerpts – Second Edition July 2012 PrefaceIndia Inc. is growing. SME are growing faster. In the midst of the Internet revolution, theyare caught between the two methods of doing business. One is bullock cart method (legacyprocedures) and the other is business process driven method.This book gives the reader the basic as well as advanced concepts of ERP. The businesslogic is prepared from the business rules approved by the top management. The entireorganization, business partners, associates, employees, work as per the system defined bythe business rules. The ERP captures these business rules. ERP software system will nowensure that everybody follows the same. ERP and ISO procedures go together. ERP iscomplete integrated business management software. This manual intends to define theconcept and explain the logic on which ERP is designed and customized for a typicalorganization, especially the manufacturing business, as this poses the biggest challenge indeploying ERP on the shop floor.What is DNS?The name DNS or the Digital Nervous System is mentioned in the book ‘Business @ speedof thought’, written by Mr. Bill Gates. The ERP is like the nervous system of the humanbody for the business. Reader will find the word DNS used in the book as synonym to ERP.MIS or the Management Information System in the business organization is the result ofgood ERP software. All kinds of organizations are using ERP to get good MIS. For instance,hospitality industry, hospitals, airlines, institutes, etc. This book also deals with themanufacturing business, which is yet unexplored. The supply chain management (SCM) isalso one of the key business processes that are integrated in a good ERP system.There is a need for ERP book that give practical guidelines. Managers do not understandthe idea that manufacturing activity can be viewed as a process and then improved. Once Ihad a chance to talk to someone in an MNC food chain joint. He showed me a manualwhere it was clearly written “serve the glass of the soft drink with four cubes of ice and putin the left side of the plate.” There are not many SME organizations that have bothered tomake a proper ‘SOP’ (Standard Operating Procedures) manual. Sometimes the MD argueswith me, ‘what is there to write’? In other words, hardly any document is available.This book does not discuss the hard-core programming used in the ERP software. Bits andbytes, tables of the backend RDBMS is not described in this book. This book is not for adeveloper who is looking for programming techniques used in ERP. Jyotindra Zaveri, Pune j.zaveri@dnserp.com Page 8 of 400
  8. 8. ERP Book Excerpts – Second Edition July 2012 AcknowledgementsThe author would like to thank the team at DNS e-Business Consultancy for their help in thecreation of this book. Many thanks to the reviewers who have greatly assisted indeveloping the book. I thank Dr. P. C. Shejwalkar to read the book and write the foreword.I thank Mr. Shriniwas Rairikar (MCCIA), Dr. A. P. Ghose to give me guidance, especiallystressing focus for the MBA students. I thank Dr. Milind Oka for taking his time forreviewing this book and give valuable suggestions.Care is taken to alter the actual data so that real name or actual information is notdisclosed. However, in some case of screen dumps or showing graphics image of ERP input/ output, some name may also appear, but the care is taken that the same does not harmthe businesses. Especially while presenting case studies, organization may not like topublish the name directly, so I have avoided taking the name of the organization whereverpossible.I would like to thank Ms. Sulochana, Ms. Poonam, (Mumbai) and Mr. Surendra K. (Pune) ofHimalaya Publishing House for publishing this ERP book.Effort has been made to trace the owners of copyright material, in a few cases this hasproved difficult. I take this opportunity to offer my apologies to any copyright holderswhose rights I may have unwittingly infringed. Jyotindra Zaveri Page 9 of 400
  9. 9. ERP Book Excerpts – Second Edition July 2012Learning Objectives“What is in it for me?” Upon completion of this book, reader will be able to: 1. Describe the concept of ERP. 2. Define key terms as they relate to ERP. 3. Understand the Material Requirement Planning and supply chain management. 4. State the benefits of ERP. 5. State the pitfalls of ERP implementations. 6. Understand the need for change management or Business Process Reengineering. 7. Learn about the MIS or Management Information System. 8. Understand the Total Cost of Ownership (TCO). 9. Write a business case to justify an ERP implementation 10. Align strategic goals, people, knowledge processes, and internal systems 11. Concept of business processes linking with other processes. 12. Understand a key business processes. Improve and simplify a business process. Apply the result of business process analysis to an ERP implementation. 13. Explain the interrelationships among the core business processes of sales order or Order Receipt Information or Order Acceptance, Bill of Materials (BOM), and work order to production. 14. Describe the technological infrastructure requirements in implementing ERP. 15. Describe project management and its use in implementing an ERP system. Describe steps necessary to successfully implement an ERP system 16. Describe the roles and responsibilities of the key organization players or stakeholders. 17. Describe how ERP can be used to achieve and sustain competitive advantage. Page 10 of 400
  10. 10. ERP Book Excerpts – Second Edition July 2012About the bookSome companies use information to innovate, control costs, or capture new markets.Others gather and evaluate information, but seem unable to translate data into productivity.In this ERP book, the author examines how companies use the management information togain the competitive edge.Enterprise Resource Planning (ERP) helps the organization, especially manufacturingcompanies to manage the growth. There will be one more ‘w’ in the WWW’ that is wWWW,the wireless-World-Wide-Web. SME cannot keep on using the bullock cart method of doingbusiness anymore.What is new in this ERP book?Unlike other ERP textbooks, this book gives actual data entry screens, reports, and masterfiles details for practical learning. This book is a good reference for various key functionsmanagers, such as accounts, purchase, sales, production, etc. It is not just a book but alsoa companion for corporate commandos. This ERP book might not seem extra-ordinary, butit is. Business processes integrated in ERP should have already been demystified, but it hasnot been.What does this ERP book offer to lecturers, faculties, consultants?The book is projected to be a comprehensive guide to all aspects of deploying ERP within anorganization. Reader will find that this ERP book has a good range of case studies tosupport their teaching.Who should use this ERP book?This book is useful for existing ERP users and ERP power-users as well. Senior managersand directors, CEO, CFO, COO, seeking to deploy ERP to benefit their organization. Forcompanies who have deployed ERP but not able to understand why real benefit is not seen.Study of this book will reveal the mistakes made by management, ERP coordinators, ERPtask force, or ERP steering committee. Use this book before, during and after ERP isdeployed, as a reference material. The knack to making informed decisions is necessary forsuccess. Yet many times, managers make vital decisions without real information. Use thisbook to understand how you can use ERP to enhance your decision-making aptitude. Thisbook will be of immense value to professionals dealing with ERP implementation, I. T.professionals, mangers handling sales and distribution, logistic, supply chain and finance.MBA Students:This ERP book will be very useful to the B-Schools students who want to pursue their MBA.All these aspiring managers must know ERP well. In the interviews now on companies willnot ask whether you know MS office or not, they will ask, “Do you know ERP”? This will beuseful for managers working in small and medium size enterprises (SME).ERP Case studies:The author has worked on live ERP projects for over 200 organizations, in India and abroad.This is result of some twenty years of practical ERP experience. The author had anopportunity to offer I. T. solutions to small and large organizations, private and Governmentorganizations. The ERP book also includes several case studies to illustrate various points inthe book. This important book gives tactics about ERP implementation. The need has Page 11 of 400
  11. 11. ERP Book Excerpts – Second Edition July 2012never been more crucial. Global economic scenario is unpredictable. The competition isincreasing. Business executives are challenged to leverage I. T., to improve the enterpriseperformance. This book attempts to answer questions such as, ‘How do you become astrategic ERP consultant, that enables efficient business management and improveoperational efficiency?’ ERP is also evolving. Author discusses the emerging developmentsand compelling ‘Business Process Management’ (BPM) for success.What can ERP do for the SME?Act confidently. Improve operational efficiency. Give the enterprise the edge it needs tosucceed. Study this book to see why even small and medium business (SMB) units areusing ERP software to achieve a competitive advantage.The decision making process is enriched if additional, relevant information is available.However, collecting information is costly. Hence, cost of additional information need also tobe controlled. ERP will help user in this aspect immensely. Decision making underuncertainly will be facilitated. ERP is synonym to the ‘DSS’ or Decision support system.This ERP book explains how ERP as a management tool, in a SME is a powerful and strategicset of applications that provides business visibility with real-time personalized access toenterprise data, for the purpose of analyzing, and benchmarking customers, suppliers, andthe overall business performance.This book discusses the common questions asked, to run a manufacturing companyefficiently: Do you get information when you want? Do you have islands of information? Isstores-in-charge able to give you correct quantity of raw material in stock, as of now? Ispurchase order linked to material inwards? Is inventory and accounts integrated?The companion website:Faculty and students can use the online resource for this book at www.dnserp.com. Thiscompanion website will be helpful for students as well as lecturers. Make the most of yourstudies.This book attempts to answer all questions about ERP that you wanted to ask, but did notknow whom to ask…. Page 12 of 400
  12. 12. ERP Book Excerpts – Second Edition July 2012 About the authorProf. Jyotindra Zaveri (a.k.a. Jyoti) - IT consultant and trainer. Computer Engineer,(Germany). IT professional since...1975.Specialist in ERP and Digital Marketing. He has been always working with innovative technologies in IT to build a digital eco system, to empower users. He has mastered fifteen digital platforms and specializing in topics such as Social Media, ERP, CRM, and e-Commerce. He is specializing in digital platforms with a passion for tapping the power of the social media and related technologies and applying them for business development. Having lived through every avatar of Internet Marketing, he can bring a depth of online experience; rare among today’s ‘copy-paste’ culture. He is passionate about Business Process Re-engineering (BPR) and challenges the legacy methods. He enjoys working with motivated and inspiring people providing creative solutions to business needs. He offers business solutions rather than solving IT challenges. He lives on the web: Always found stuck with his Apple iPhone, laptop, airplane seat, or combination of all these. Visiting faculty in India and Germany. Over 36 years of experience in IT, combined with academic credentials in Electronics and Electrical Engineering from VJTI, Mumbai, India. See month-by-month and year-by-year track-record since ...1975 http://www.dnserp.com/track_record.htm He has written seven books. IT consultant with knowledge of computer hardware, software and Internet technologies; rather a unique combination. Travelled extensively around the word: Bahrain, France, Germany, Italy, Japan, Malaysia, Nederland, Singapore, Switzerland, Thailand, UAE, UK, and USA. After completing studies, his first job was in IBM (1975). He was specially trained in Leipzig, Germany. He was specially invited by Microsoft to meet Mr. Bill Gates in Mumbai (his first visit to India), on 5 March 1997. He receiving the Premium Channel Partner Award from Intel From Mr. Atul Vijaykar, President, Intel Asia Electronics Inc., May 1998.Specialties: Digital platforms for marketing and training, Web 2.0, SEO, E-business, E-commerce, ERP, Social media marketing strategies, Cyber branding, MIS, Supply chain management, Change management (BPR). Page 13 of 400
  13. 13. ERP Book Excerpts – Second Edition July 2012 Book reviewI appreciate Prof. Jyotindra Zaveri for making immense efforts in authoring the book"Practical Guide to Enterprise Resource Planning". It reflects several years of experienceand sincere efforts to present the complex subject in simple language loaded with livecases.Prof. Jyotindra Zaveri has been helping enterprises, especially from the Small and MediumEnterprises segment in implementing ERP to gain competitive advantage. Several cases inthe book clearly reflect the dexterity. It is especially useful in the highly dynamic anddemanding market environment of the 21st century that SME have to face.This book is a real treasure of the very best concepts from academics, relevant andinsightful case studies, and powerful prescriptions for practicing managers. Prof. JyotindraZaveri has tried his best to keep away the hype and jargon. Reader can easily navigate theworld of ERP.B-School students as well as practicing managers will certainly find this book veryinteresting especially with its own companion website.Dr. Milind M. Oka[Dr. Oka holds Ph.D. from University of Pune. He is Certified Assessor of Quality Systems.He has rich experience of over 35 years. He is an Academician, Management Consultant,Author, and Corporate Trainer.] Page 14 of 400
  14. 14. ERP Book Excerpts – Second Edition July 2012 Book reviewThe book on ERP by Prof. Jyotindra Zaveri presents in a very lucid way and simple languagevarious aspects of ERP. Especially the highlights seamless integration of business processesin ERP by using more than 300 diagrams / pictures / tables and giving practical case studiesand examples from purchase, accounts, exports, material management, HR and alldepartments, which has increased its usefulness and value.I can safely say that even a layman like me or anybody working in ERP system will get allpractical hints and guidelines regarding what, why, where, when and why of ERP.Mr. Shriniwas Rairikar, M. Com., MPM, LLB, DLL & LW,ISO 9001-2000 Lead Auditor. ISO 9001-2000 Diploma (U.K.).Senior Director, MCCIA.Founder Director – Dasbodh Management academy. Book reviewDear Sir,At the very outset, I would like to congratulate you for the launch of your book.I have just one comment - being an institute in e-business, of all the books on ERP that Ihave gone through, yours might be in the top 10 books that I have read so far. Many ofthem are by international authors also.Once again, congratulations for the launch of the book. I am sure it will be a great success.Thanking you,With warm regards,Jai SinghDirector IIeBM, Management Institute. Page 15 of 400
  15. 15. ERP Book Excerpts – Second Edition July 2012 Book reviewThe recognition of ERP as a business application does deserve a special mention. The mostcrucial factor in the whole system of ERP is the implementation aspect. The implementationphase can decide the fate of ERP and its success.The success of an ERP implementation again lies on the speed at which it is introduced andapplied. For this, necessary training needs to be imparted to all concerned who canimplement ERP at the fastest speed. This training converted into practice byimplementation of ERP would reveal the real advantages that an organization would receivein terms of cost control and cost reduction at every stage and improvement in profitability.The present work is the outcome of Prof. Zaveri’s hard work of over a period of nearly twodecades in this area of ERP. The contents of this book depict his deep knowledge about thesubject. His step-by-step approach with logical explanation at every stage leads a reader toend up with a thorough understanding of the subject. Even a nonprofessional canunderstand the language that he has used in his book.Prof. Zaveri’s interaction with various industries as well as students has helped him toassimilate his ideas in writing this book.I encourage and recommend SMEs, corporate, and others to read this book, understand thesubject thoroughly and to implement ERP at their organizations. This book would also beextremely useful to students to understand the subject since it is written in a most lucidway.I wish all success to Prof. Zaveri in launching this unique book for the first time in themarket. Dr. A. P. Ghosh Director Balaji Institute of Modern Management (BIMM) Sri Balaji Society, Pune[Dr. A. P. Ghosh has a Ph. D. in Financial Management from University of Pune. He iscertified corporate director from “World Council for Corporate Governance” London. He hasauthored many books on finance and management]. Page 16 of 400
  16. 16. ERP Book Excerpts – Second Edition July 2012 CONTENTSPART I ..................................................................................................................................................................... 22CHAPTER 1. INTRODUCTION ..................................................................................................................... 24HOW TO USE THIS BOOK? ........................................................................................................................... 24 ERP Definition ................................................................................................................................................ 25 ERP vendors.................................................................................................................................................... 27 What is the difference between SAP and ERP? ................................................................................. 27 ERP customization ........................................................................................................................................ 28ABOUT SMALL AND MEDIUM SIZE COMPANIES ............................................................................. 29COMPUTER NETWORK SYSTEM SCHEMATIC ..................................................................................... 32IT INFRASTRUCTURE RECOMMENDATIONS CHECKLIST ........................................................... 33ERP IMPLEMENTATION PROJECT MANAGEMENT ........................................................................... 35 Implementation Strategy .......................................................................................................................... 36 Roadmap .......................................................................................................................................................... 41CHAPTER 2. MASTERS DATA AND PRINTING CONCEPTS .......................................................... 45MASTER DATA ENTRY FORMS.................................................................................................................... 45PRINTING (HARDCOPY) ............................................................................................................................... 49CHAPTER 3. CHANGE MANAGEMENT ..................................................................................................... 51BPR OVERVIEW ................................................................................................................................................. 54WHAT USER WANTS? ..................................................................................................................................... 57CHAPTER 4. TCO OF ERP .............................................................................................................................. 58CHAPTER 5. ERP IMPLEMENTATION ..................................................................................................... 60OATH ........................................................................................................................................................................ 60WHY ERP PROJECT FAILS ............................................................................................................................ 61ERP IMPLEMENTATION TIPS FOR SUCCESS ..................................................................................... 66IMPORTANT INSTRUCTIONS ..................................................................................................................... 67CUSTOMIZATION .............................................................................................................................................. 69IMPORTANCE OF QC DATA .......................................................................................................................... 73CRP ........................................................................................................................................................................... 75TEST RUN: CHECKING AND MARKING .................................................................................................. 77PROOF OF CONCEPT FILE ............................................................................................................................ 79DRAFT OF LETTER TO INFORM VENDORS / CLIENTS .................................................................. 83CHAPTER 6. GETTING STARTED ............................................................................................................... 84ERP CONCEPT ..................................................................................................................................................... 85 Material outward ........................................................................................................................................... 87 Page 17 of 400
  17. 17. ERP Book Excerpts – Second Edition July 2012CHAPTER 7. SCOPE OF ERP MODULES.................................................................................................. 88CHAPTER 8. ERP DOCUMENT FLOW AND MATERIAL FLOW ................................................... 112PART II ................................................................................................................................................................. 114SECURITY MODULE & CLOSING BALANCE ....................................................................................... 116CLOSING BALANCE ........................................................................................................................................ 116CLOSING STOCK .............................................................................................................................................. 119CHAPTER 9. PROCUREMENT MODULE ................................................................................................. 123 PURCHASE MASTER.............................................................................................................................................. 125 Vendor Type Master .................................................................................................................................. 125 Vendor Master ............................................................................................................................................. 126 PURCHASE TRANSACTIONS ................................................................................................................................. 129 GRN (Goods Receipt-cum-inspection) ................................................................................................ 138 Job Order ....................................................................................................................................................... 138 PURCHASE REPORTS ............................................................................................................................................ 139CHAPTER 10. IMPORT PURCHASE MODULE .................................................................................... 139CHAPTER 11. MATERIAL MANAGEMENT (MM) MODULE .......................................................... 141 INVENTORY MASTER ............................................................................................................................................ 142 Item Master .................................................................................................................................................. 143 Finished Goods (Products) ...................................................................................................................... 144 Location concept ......................................................................................................................................... 146 Subcategory Master................................................................................................................................... 147 UOM (Unit of Measurement) Master.................................................................................................... 148 INVENTORY TRANSACTIONS ................................................................................................................................ 149 Goods Receipt Note (GRN) / Purchase Bill data entry screen ................................................... 149 Stock Transfer Challan (STC) ................................................................................................................ 150 Purchase return ........................................................................................................................................... 150 Stock Adjustment Note ............................................................................................................................ 151 INVENTORY REPORTS........................................................................................................................................... 151 GRN OR PV Register .................................................................................................................................. 151 Item Ledger .................................................................................................................................................. 153 Stock Statement ......................................................................................................................................... 153 MIN Register: ............................................................................................................................................... 154 Stock Adjustment Note Register: ......................................................................................................... 154CHAPTER 12. BOM MODULE ..................................................................................................................... 155CHAPTER 13. SUBCONTRACTOR OUT MODULE ............................................................................. 175CHAPTER 14. PRODUCTION MODULE ................................................................................................. 188 MAKE TO ORDER- MAKE TO STOCK .................................................................................................................... 191 E-MANUFACTURING.............................................................................................................................................. 193 ERP PRODUCTION MODULE LOGIC .................................................................................................................... 193 ASSEMBLY PRODUCTION ..................................................................................................................................... 194 PRODUCTION MASTER ......................................................................................................................................... 194 MACHINE MASTER................................................................................................................................................ 195 LOCATION ............................................................................................................................................................. 195 PRODUCTION TRANSACTIONS ............................................................................................................................. 195 WORK ORDER ...................................................................................................................................................... 195 PRODUCTION ENTRY ............................................................................................................................................ 196 SUBCONTRACTOR OUT ....................................................................................................................................... 196 Page 18 of 400
  18. 18. ERP Book Excerpts – Second Edition July 2012 FAQ FOR PRODUCTION MODULE ......................................................................................................................... 198 PRODUCTION REPORTS........................................................................................................................................ 200 Work Order Register.................................................................................................................................. 200PROCESS PRODUCTION .............................................................................................................................. 201 PRODUCTION MASTER ......................................................................................................................................... 202 MACHINE MASTER EXPORTED TO EXCEL SHEET IS SHOWN BELOW: ................................................................ 202 OPERATOR MASTER ............................................................................................................................................. 203 PROCESS PRODUCTION TRANSACTIONS ............................................................................................................ 203 WORK ORDER ...................................................................................................................................................... 203 Production Planning ................................................................................................................................... 204 Process Production Entry ......................................................................................................................... 205 STAGE WISE INSPECTION .................................................................................................................................... 206 PRODUCTION REPORTS........................................................................................................................................ 207 Work Order Register.................................................................................................................................. 208 Production Register.................................................................................................................................... 209 MRP .................................................................................................................................................................. 209 Production Indent ....................................................................................................................................... 211CHAPTER 15. ORDER FULFILLMENT MODULE ................................................................................ 215 Customer Type Master ............................................................................................................................. 216 Coordinator master .................................................................................................................................... 218 Sales Engineer master.............................................................................................................................. 218 Dealer Master ............................................................................................................................................... 222 Delivery Mode Master ............................................................................................................................... 222 Lead ................................................................................................................................................................. 224 Delivery Schedule....................................................................................................................................... 229 Sales Menu .................................................................................................................................................... 230 Sales Invoice ................................................................................................................................................ 231 Commercial invoice.................................................................................................................................... 232 Sales Quotation ........................................................................................................................................... 233 Sales Invoice ................................................................................................................................................ 237 Return Goods note..................................................................................................................................... 240 Purchase Return (Excisable) Invoice. ................................................................................................. 241 ORDER FULFILLMENT (SALES) REPORTS ........................................................................................................... 242 Invoice Register .......................................................................................................................................... 247 Enquiry register ........................................................................................................................................... 248 Sales Invoice Register .............................................................................................................................. 248 Quotation Register ..................................................................................................................................... 250 OA (ORI) Register ...................................................................................................................................... 251 Reverse Invoice Register ......................................................................................................................... 251 ORI OR OA Status Register .................................................................................................................... 251 Ledger ............................................................................................................................................................. 251 Sales Analysis .............................................................................................................................................. 254 Dashboard ..................................................................................................................................................... 254EXPORT MODULE ............................................................................................................................................ 256CHAPTER 16. SUBCONTRACTOR IN ..................................................................................................... 260MATERIAL INWARD TRANSACTION .................................................................................................... 262CHAPTER 17. ACCOUNT MODULE .......................................................................................................... 263 CHART OF ACCOUNTS RECOMMENDATIONS ....................................................................................................... 267 ACCOUNT MASTER ............................................................................................................................................... 269 Page 19 of 400
  19. 19. ERP Book Excerpts – Second Edition July 2012 Group (Schedule) Master ........................................................................................................................ 269 Subgroup Master ........................................................................................................................................ 270 GL Master ...................................................................................................................................................... 271 Details master: Narration Master ......................................................................................................... 271 ACCOUNT TRANSACTIONS ................................................................................................................................... 271 MONEY RECEIPTS ................................................................................................................................................. 273 ADJUSTMENT WINDOW ........................................................................................................................................ 274 JOURNAL VOUCHER .............................................................................................................................................. 275 PAYMENT VOUCHER ............................................................................................................................................. 276 CONTRA ENTRY .................................................................................................................................................... 277 ADJUST OPEN SALES INVOICE ........................................................................................................................... 277 ADJUST OPEN PAYMENT VOUCHER ..................................................................................................................... 277 CREDIT NOTE ....................................................................................................................................................... 278 DEBIT NOTE ......................................................................................................................................................... 279 EXPENSE VOUCHER .............................................................................................................................................. 281 ACCOUNT REPORTS ............................................................................................................................................. 282 CREDIT NOTE REGISTER ..................................................................................................................................... 282 DEBIT NOTE REGISTER ....................................................................................................................................... 283 SUB LEDGER TRIAL BALANCE ............................................................................................................................. 283 GENERAL LEDGER ................................................................................................................................................ 284 BANK BOOK .......................................................................................................................................................... 284 CASH BOOK .......................................................................................................................................................... 284 TRIAL BALANCE .................................................................................................................................................... 284 CONTRA ENTRY REPORT ...................................................................................................................................... 285 CREDIT NOTE REGISTER ...................................................................................................................................... 285 DEBIT NOTE REGISTER ........................................................................................................................................ 285 JOURNAL VOUCHER REGISTER ............................................................................................................................ 285 CUSTOMER FULL LEDGER .................................................................................................................................... 286CHAPTER 18. ACCOUNTS POINTS ......................................................................................................... 287CHAPTER 19. SALES TAX AND VAT ...................................................................................................... 291CHAPTER 20. EXCISE INTEGRATION .................................................................................................. 294DAILY STOCK ACCOUNT OR DSA REGISTER ................................................................................... 297GAR 7 – CHALLAN .......................................................................................................................................... 298CHAPTER 21. SARBANES-OXLEY ........................................................................................................... 301CHAPTER 22. AFTER SALES SERVICE MODULE ............................................................................. 302MACHINE HISTORY CARD OR HC .......................................................................................................... 302CHAPTER 23. PAYROLL MODULE ........................................................................................................... 308CHAPTER 24. AUTOMATIC EMAIL ALERT .......................................................................................... 317CHAPTER 25. ERP MAJOR TRANSACTIONS LIST .......................................................................... 319CHAPTER 26. OTHER MASTERS .............................................................................................................. 321CHAPTER 27. BACKUP .................................................................................................................................. 323CHAPTER 28. ERP BLOG .............................................................................................................................. 329PART III ............................................................................................................................................................... 331CHAPTER 29. CASE STUDIES ................................................................................................................... 332 ERP FOR CONSTRUCTION INDUSTRY ................................................................................................................. 333 Page 20 of 400
  20. 20. ERP Book Excerpts – Second Edition July 2012 ERP FOR A CORRUGATED BOX MANUFACTURING COMPANY .............................................................................. 334 ERP FOR VADA PAV COMPANY ........................................................................................................................... 342 ERP FOR LENS MAKING COMPANY ...................................................................................................................... 346 ERP FOR OEM SUPPLY OR MAKE TO ORDER ...................................................................................................... 353 ERP IN PRECISION MACHINING MANUFACTURING ............................................................................................. 355 ERP FOR CHEMICAL INDUSTRY ........................................................................................................................... 356 ERP FOR A UPS MANUFACTURING ..................................................................................................................... 357 ERP FOR ELECTRONIC CONTROL INSTRUMENTS MANUFACTURING................................................................... 359 ERP FOR AN INDUSTRIAL SYSTEM MANUFACTURING......................................................................................... 360 ERP FOR SPM MANUFACTURING ........................................................................................................................ 362 ERP FOR FURNITURE MANUFACTURING ............................................................................................................. 363 ERP FOR TOYS MANUFACTURING ....................................................................................................................... 365CHAPTER 30. MC DONALD’S STORY..................................................................................................... 368CHAPTER 31. AUTOMOBILE ENTERPRISES ..................................................................................... 371CHAPTER 32. RFID ......................................................................................................................................... 372CHAPTER 33. QUESTIONS ......................................................................................................................... 373CHAPTER 34. ERP DATA VALIDATION ............................................................................................... 379CHAPTER 35. HUMOR ................................................................................................................................... 387GLOSSARY........................................................................................................................................................... 391INDEX .................................................................................................................................................................... 397 Page 21 of 400
  21. 21. ERP Book Excerpts – Second Edition July 2012 Part IIsland of information WHY E.R.P ? BECAUSE OF ISLANDS OF INFORMATION My growth will be OK . No? Material Management Finance Corporate office Production Sales GroupFigure 1: Why ERP? Islands of information. Page 22 of 400
  22. 22. ERP Book Excerpts – Second Edition July 2012 Seamless Integration of business processes in ERP SECURITY CRM VAT COST SHEET ISO / Q C ESTIMATE LOCAL Sub-Contractor Order OUT PAYROLL fulfillment PURCHASE Accounts HR Import BOM EXPORT Purchase SUB- Production CONTRACTOR IN Material PLANT Automatic After Sales Multi- MAINTENANCE ServiceManagement location E-Mail Send / Receive data Alerts Resource Sales & MRP Distribution Matrix EXCISE E-Business Page 23 of 400
  23. 23. ERP Book Excerpts – Second Edition July 2012Chapter 1. IntroductionHow to use this Book?This ERP book gives overall scope of generic ERP software package. To understand the ERPin-depth the author has used a package called DNS. Hence, ‘DNS’ appears in many screenshots. Actual print-screen of the data entry screen and the actual layout of the outputs aregiven for key procedures. The explanation of each ERP module gives the business blueprintwhere as the printouts shown gives the ‘Proof of Concept’ (or POC).This Business Blueprint and POC will also be related to a particular ‘avatar’ (or version) ofERP and make of the ERP. This may vary depending on the ERP vendor, versions, etc.This is a very important reference document and therefore it is necessary that the ERPimplementer consultants, ERP coordinator, and ERP users all study the concepts well beforeembarking on to the ERP software deployment. This ERP book is a good companion duringthe software installation.This book is organized into three parts: 1. The first part discusses the ERP implementation methodology and overview of implementation of ERP system for effectiveness of ERP systems. 2. The second part discusses details about ERP modules or business processes such as accounts, purchase, sales, production, etc. These chapters are further divided into sections containing information about master, transaction, and report. 3. The third part gives some interesting case studies.Further learning resource: You will find many interesting PowerPoint presentations andvideo lectures of the author here in his free e-Learning websitehttp://www.dnserp.com/erp_presentaions.htmAdditional ERP groups and blogs to learn latest:https://www.facebook.com/groups/discuss.erp Join Facebook Group ERP.http://www.facebook.com/dnserp Like Facebook Page ERP.http://dnserp.wordpress.com Subscribe ERP Blog.http://www.twitter.com/followERP Follow on Twitter.http://linkd.in/lFj98r Join ERP, E-business Forum LinkedIn Group.Welcome to ERPThis ERP book is meant for both Power User (ERP experienced user) as well as First TimeUser. This book will introduce all important concepts and features of this advanced ERPpackage. The ERP package versions (avatar) may undergo changes as the development,customization, and implementation take place. The book will also discuss many advancedconcepts of ERP software. Page 24 of 400
  24. 24. ERP Book Excerpts – Second Edition July 2012The DNS is short for Digital Nervous System. The word DNS is synonym with the word ERP.Throughout this book, reader will find the word DNS used instead of ERP.ERP is all about making smarter as well as faster decisions. To make well-informed andtimely decisions, you need instant access to accurate information from every function inyour enterprise. You need to focus on urgent tasks, instead of fire fighting. This bookexamines how to gain reliable, accessible information using ERP, and how to use thatinformation to make better decisions, to a stronger competitive position.What is the relation of MIS and ERP?MIS (Management Information System) is a system to give information to managers formaking decisions. ERP ensures the data capture in chronological order. ERP ensures thatthese managers get MIS. ERP is management software that will ensure correctness of inputdata and completeness of input data. Therefore, MIS is the output of ERP. What user willsee on the computer screen is real time information. Behind the scene is business processmanagement (BPM) done by the Enterprise Resource Planning software.ERP DefinitionThere seems to be no universally accepted definition of the ERP software, but DeloitteConsulting has defined ERP as follows: An Enterprise Resource Planning system is a packaged business software system that allows a company to: • Automate and integrate the majority of its business processes • Share common data and practices across the entire enterprise • Produce and access information in a real-time environment Source: Deloitte Consulting, New York, 1999.ERP definition by the author:“Enterprise Resource Planning software is complete integrated business managementsoftware, which captures data in chronological order, and is used to link businessesprocesses automatically, and give real time information, to authorized user”.Enterprise Resource Planning System is a multi-user, multi-location, and multi-company,software solution. Page 25 of 400
  25. 25. ERP Book Excerpts – Second Edition July 2012ERP-centric organization Non-ERP-centric organizationUnderstands that integrated business Does not fully appreciate the contributionprocesses add significant value to the that integrated business process make toorganization. Understands that business the organization and the realization of theprocesses are a significant contributor to organizational strategy.the fulfillment of an organization’sstrategy.Incorporates ERP into the management Management of business processes is notpractices of the organization. the primary focus.ERP and Internet were probably the two most important information technologies to emergeinto widespread use in the 1990s. Page 26 of 400
  26. 26. ERP Book Excerpts – Second Edition July 2012 In 1999, total revenue from the ERP software and services market was US$18.3 billion and US$ 19.9 billion in the year 2000. ERP implementation costs are often reported to be five to ten times the cost of software licenses. If so, organizations worldwide spent something like US$100 billion per annum on ERP software systems. In short, organizations around the world have made huge investments in ERP software systems in the past decade. Source: Second wave ERP published by CambridgeERP vendorsThere are hundreds of software companies offering ERP solutions. There are two kinds ofERP companies. (1) ERP software developing organizing and (2) ERP implementingpartners.Some examples of ERP vendor companies:SAP, Oracle Apps (this includes PeopleSoft and JD Edwards), Microsoft Dynamics (Navision),Baan, etc.Some examples of the ERP implementer partners:Siemens InfoTech, PwC, Infosys (recent acquisition of Axon, for instance), etc.What is the difference between SAP and ERP?This is wrong question. It is like asking, “What is the difference between a car and HondaAccord?” Honda Accord is one of the models of cars. Car is a generic name given tovehicle. Similarly, ERP is generic name given to enterprise management integratedsoftware.Please note that SAP is a well-known, leading ERP company in the world. But, SAP is notthe only ERP vendor. There are many ERP companies. SAP is one of the ERP companies inthe world. There are hundreds of them. ERP is a generic name of the businessmanagement software. SAP is a specific name of the one of the companies, which hasdeveloped ERP software. Therefore, it is wrong way to ask, “What is the difference betweenSAP and ERP?” One may ask a question, “What is the difference between SAP and MSDynamics?”? That makes more sense.SAP Certification:No doubt, SAP is considered as # 1and learning SAP ERP will be a feather in your cap,however, (first you need the cap). Many students in India unfortunately are carried awayby the SAP brand name without understanding that, just by sitting in the Mercedes car, youcan’t learn driving. Make sure that ERP certificate is backed by adequate practical trainingand at least two years of work experience. A fresher with an SAP certificate is a sad joke! Page 27 of 400
  27. 27. ERP Book Excerpts – Second Edition July 2012Group 1 Group 2 (also referred as Group 3 Tier II)SAP Epicor ABASOracle Sage Activant Solutions Inc.Oracle eBusiness Suite Infor Bowen and GrovesOracle JD Edwards IFS CompiereOracle Peoplesoft QAD ExactMicrosoft Dynamics Lawson NetSuite CDC Software Visibility CGS Hansa World Consona SysproERP customizationAdding new requirements is called customization. This may be non standard feature. This non-standardinvolves changing software codes. It can range from relatively simple changes, such asdeveloping very special reports, through major changes, such as changing the program ,source code itself.ERP software is a semi-finished package The user organization must ‘configure’ to their finished package!needs. This is also referred as parameterization, enabling, or disabling certain businessprocess. This configuration or initial setup procedure will allow user to use the package as it ationis.An implementation that involves configuring but not customizing the ERP is called a ‘Vanillaimplementation’. This is fastest and cheapest way to get into ERP for SME. . Although most ERP software are standard software package, in practice it is observed that 80% to 90% procedures are standard and can be used as it is. About 10% to 20% procedures need to be customized (changed) during the implementation. implementation. These changes (or fine-tuning) will depend on many factors such as final product, current tuning) legacy procedures, maturity level of senior executives, kind of customers, etc. Page 28 of 400
  28. 28. ERP Book Excerpts – Second Edition July 2012About Small and Medium size companies Corrugated Box Industrial springs n Toys and games Safety Valve Special Purpose Machine Firefighting equipment Eye lens Vada Pav UPS and InverterFigure 2: Small and Medium Sized companies products Page 29 of 400
  29. 29. ERP Book Excerpts – Second Edition July 2012 Page 30 of 400
  30. 30. ERP Book Excerpts – Second Edition July 2012Small and Medium size companies are using ERP to gain competitive advantage.Many SME or small and medium size companies in India are growing. They all needcomplete integrated business management software to manage that growth. The companymay be engineering, making plastic toys, making lenses, or discreet products, all need ERPsoftware. Why ERP? • Traditional accounting packages are ‘Financial reports-centric’. They are primarily designed to inform management of a company’s financial condition long after it has conducted its business. • On the other hand, ERP adopts a day-to-day perspective. It provides strategic information and tools in real-time, when you need it the most. • ERP is answer to the following frequently asked questions Do you get information when you want? Do you have islands of information? Pune emerges as major hub for German companies: Pune has emerged as the city with the single highest concentration of German companies in India. A significant number of prospective new comers are likely to be from the area of advanced materials used in the automotive and machine building sectors. These companies will largely be SMEs. According to the Indo-German Chamber of Commerce. There are over 950 German companies in India, of which 100 are located in Pune. This may become 200 in about two years. Mercedes Benz and Volkswagen are already present in Pune. Source: Mr. Zubin Kabraji, regional director, Indo-German Chamber of Commerce, Pune. Page 31 of 400
  31. 31. ERP Book Excerpts – Second Edition July 2012COMPUTER NETWORK SYSTEM SCHEMATIC Local Area Network or LAN • SERVER HIGH PERFORMANCE COMPUTER (e.g. Xeon) • With MS Windows 2003 Server Operating System • MS SQL 2005 SERVER RDBMS • ANTI-VIRUS SOFTWARE UPS SERVER EDITION Switch User PC - Accounts User PC - User PC - Purchase Stores User PC - User PC - Printers as per Production Sales requirement ERP Network Server PC must have a CD / DVD Drive for Backup. Server network with Switch – Gigabit LAN. CAT 5 LAN cables. Switch or Wi-Fi network, supported by UPS battery backup.Figure 3: Server computer and user’s PC Page 32 of 400
  32. 32. ERP Book Excerpts – Second Edition July 2012IT infrastructure recommendations checklist Checklist to plan hardware, software, and personnel for ERP deployment: 1. At head office, provide one High performance Processor Server (e.g. Intel Xeon CPU) e.g. with Minimum 2 GB RAM, minimum 80 GB HDD. (With CD or DVD writer for taking periodical backup). With at least two nodes (256 MB or 512 MB RAM) with Operating system WIN XP or Vista for your software Coordinator and our QC team to test EXE, prepare master data, give training, etc. Other client sides PC (nodes) with MS Windows XP (or later versions) with at least 256 MB RAM. ERP developm development team and implementation team will also use these computers during the initial phase. These nodes (client PC) should be networked with the ERP Server computer. MS Windows 98 is not recommended. 2. Recommended Memory: Minimum 512 MB RAM on client computer and 512 MB or 2 GB on Server. MS Excel on client PC For Microsoft Windows Vista Operating PC. System it is recommended to have 4 GB RAM. 3. For outputs (reporting): Inkjet or Laser Jet printer (A 4 size paper), or a Dot matrix printer with fanfold setting 8.5 X 12 selection. It is recommended that users should 8.5 phase out the dot matrix printer (if not done already). 4. The monitor resolution setting should be 800 X 600. 5. Arrange to deploy licensed software: MS Windows 2003 Sever Operating System and MS SQL 2005 Server RDBMS software. MS Excel. Check with ERP vendor for exact erver software requirements. 6. One PC with Internet connection for remote support from ERP vendor’s helpdesk. It is better to send email to helpdesk email ID instead of personal email id. 7. UPS (battery backup) for the Server and switch (hub) is required for at least two/three hours. Provide Generator set for power backup if necessary, for longer electric power shutdown. 8. You may add more PCs as the data entry work increases and as users s start being trained over a period. The PC (nodes) may be networked using wired LAN or wireless LAN technology. Wi-max solutions can also be considered if available in max your location. The V Pro CPU (Intel) based, PC may be considered for the client side computers. 9. Anti-virus software with facility to update the signatures is required (a) Sever virus version for the server computer and (b) client version for each user PC. 10. At least one LaserJet (or DeskJet) printer for hard copy printouts. You may add more printers as per requirements. This is a good time to phase out the Dot Matrix s Printer. 11. Appoint ERP Coordinator exclusively, who is available during the Software testing, implementation and deployment activity. Time commitment towards Software project is essential. Page 33 of 400
  33. 33. ERP Book Excerpts – Second Edition July 201212. There will be a ‘Chief-of-Project’ (sponsor) to monitor and review the progress during the software implementation. (Usually a very senior person, like owner, with necessary authority to take crucial decisions).13. Appoint network administrator to support the IT infrastructure, such as Server, networking, etc. He will also take care of anti-virus solutions, Firewall, Login and secret password, etc. (May be same person as ERP project Coordinator).14. For remote access, provide Server with static IP address for out-locations to login. A good broadband connectivity at the server locations will be required. Internet / Email connectivity. The net connection is necessary for remote login for support.15. Provide CD / DVD (or tape backup) for taking backup of database and important software programs.16. UPS to supply electric power to the ERP Server. Battery backup for at least two / three hours. The same should also give uninterrupted power to the network-switch (or router). You may plan for separate UPS for each user PC. Generator power as per requirement.17. Date and Time setting. a. Date and Time setting is done by the network support engineer (or the computer hardware support person). The ERP server date and time setting is important and it is used at the time of capturing and saving transactions, preparing reports, etc. b. The date format of each computer should be dd-mm-yyyy. This is set using regional setting option, of control panel. c. Do: 1. Set all clients PCs Timestamp to ERP Server Time Stamp. Time and Date should be same for all PCs connected to your ERP Server. 2. Setting of All "Time zones" of all the PCs should be GMT 5:30 New Delhi, (in India). Set this from Windows control panel, Time and date Properties-Time Zone. 3. Care should be taken to ensure that user is not allowed to temper with the system data and time. Necessary password control is required. d. Do not: Do not Change time and date of the server and any other client PC, in the network at any time. Page 34 of 400
  34. 34. ERP Book Excerpts – Second Edition July 2012ERP Implementation project managementERP Implementation step-by-step strategy: 1. Scope as per 3. 4. - 2. System Database ERP proposal Legacy Requirement - - Setup, and approval docume Specifications First-cut from ERP nts / as per SRS by DEC project Logic template team organization sheets 5. Make Server ready and deploy DNS EXE 7. QC 9. First-cut Database - by Task 6. CRP - 8. Training Setup on Force team Checklist - and Demo ERP and POC to the Task Server, printouts Force deploy by DEC EXE Team 13. 10. CRP Go Live. All 11. - Checklist 12. Complete CRP ERP - Essential - and POC run by task force, authorized customizat printouts complete CRP users’ ion, by Task checklists, and starts using Force database print POC ERP changes - 14. RolloutFigure 4: Typical workflow for the implementation Page 35 of 400
  35. 35. ERP Book Excerpts – Second Edition July 2012Implementation Strategy1. IT Infrastructure Readiness: Please prepare Server computers and other items of hardware and software as described above.2. Software Project Preparation: Defining exact scope with help of the Chief of project. Prepare the legacy documents (file containing existing transactions / reports). ERP implementer consultant will help you in preparing module wise legacy file (AS IS business process).3. Kick-off meeting: ERP implementation team makes Project kick-off presentation in presence of complete Steering committee (key users).4. Preparing the SRS: System Requirements Specifications. This is well documented in the manual (called ERP Business Blueprint). Based on the legacy data and standard best business practice a business cycle will be shown. The SRS may now be required to be documented to capture exceptional scenarios.5. Gap Analysis: Clearly defines business logic. The ref. manual based on the first cut end-to-end cycle is prepared, given to ERP Coordinators for approval. Once the same is received the changes / customization takes place. This will ensure user gets essential customization done. At the same time user may do BPR and accepts the ERP business logic.6. Appoint ERP Steering committee or the task force team. This is a team comprising of one or two persons from each business function (department). Headed by the chief of ERP project and ERP coordinator. These are the ‘stake holders’ in the ERP project.7. Awareness / Training: To all ERP Users and the ERP Coordinator about ERP concept and menus and sub-menus.8. Business requirements: Discuss BPR (Business Process Reengineering) and decide the need to customize to meet your specific business requirements. Roles and Responsibility Matrix (what menu to whom).9. TO BE business process: Customization is carried out by our team (changing our programs) and preparing the ‘Proof of concept file’. This is configuring ERP software for you. The entire package is run on the server using test database (QC data) with sample master and transaction.10. CRP run: Conference Room Pilot. Task Force (and key users) is given training and asked to enter transactions and does the CRP run. ERP team will do necessary confidence building and handholding. A sample printouts of each transaction and report will be printed and kept in file called ‘POC file’ (proof of concept), for sign off.11. Data Migration: One time data transfer from legacy (old) system to new (ERP) system may be considered. This will depend on the data format of the legacy data, accuracy, and completeness of the old records. Some time it is prudent to enter the data again in the new ERP software. Although, one time migration saves time (and money) it should be done with due diligence. Many times, it is observed that the data that was migrated in the new system was actually ‘garbage’ data (not checked). Later to check and correct the masters took even more time (and money). E.g. in customer master, we need the contact person’s name, city, etc. as separate fields. In legacy data if the same is not stored properly, how new ERP system will give benefit.12. Master data preparation for test run: E.g. Item master, customer master, vendor master, BOM master, etc.13. Ownership transfer from ERP Coordinator to end-users.14. Go-Live preparation: Cutoff date – Inventory closing balance/account-closing balance in live database.15. Roll out – Go-Live: Start using ERP for all business activities. Page 36 of 400
  36. 36. ERP Book Excerpts – Second Edition July 201216. Post implementation support: Support is provided by ERP team if and when require for about a month so that all users feel confident and system stabilizesERP project managementThis is very important for the success of ERP implementation. ERP project management lifecycle consists of the following major phases: 1. Initiation. a. This includes deciding start date and finish date. b. Define working time and non-working time. c. Define the workweek, which days of the week are the usual workdays for this ERP project. Select a date that should be a nonworking day, such as a holiday (E.g., 15 August) or a day off for your organization. d. Define time units, such as 8 hours a day or 40 hours per week, or 25 days a month, etc. in the calendar. 2. Planning. a. This includes defining major milestones, tasks b. Make a list of resources c. Mark dates to fix the training days, referred as ‘ERP training calendar’. d. ERP review meetings dates. Inform all stakeholders (resources). e. Define precedence of tasks. E.g., Task 2 can start after task 3 is finished. f. Make a base plan. 3. ERP implementation. a. Track and mange. 4. Go-live. a. Discard legacy and use ERP for business management.ERP task force team manages the implementation using Project management software, suchas Microsoft Project.Task:An activity that has a beginning and an end. ERP project implementation is made up ofseveral tasks. One must enter duration for each task.Milestone:A reference point marking a major event in the ERP implementation. Milestone is used tomonitor the ERP projects progress. In MS project, any task with zero duration isautomatically displayed as a milestone.Note: Do not start with the unreasonable end date and work back reducing the projectestimate.It is better to increase the amount of resources, reduce scope, or change the plan. A lot oftime and pressure causes inefficiency with meetings to discuss why things are going wrong. Page 37 of 400
  37. 37. ERP Book Excerpts – Second Edition July 2012Resource:The taskforce members are resources. ERP Implementation consultant and ERP developerare also resources i.e. ERP coordinators, ERP taskforce member, ERP user, are all ‘resource’.Ensure time is provided for planning, teambuilding, and ERP training. One may use a dateddiary, calendar, or MS Outlook to block the dates and commit for a given task as per plan.The roles and responsibility matrix should be prepared. It is very important to assign loginID and passwords for using ERP software. If it is not done carefully, ERP server access iscompromised.Predecessor:A task that must finish before another task can start. ERP Tip: Please provide proper notebook for noting down the notes during training,clearly marked as ERP notes. Loose-leaf rough pad is not recommended. Page 38 of 400
  38. 38. ERP Book Excerpts – Second Edition July 2012Figure 5: Every member in ERP team has times when they need support.Helping ERP project team succeed.I am sure the organization that is planning to use ERP, wants the ERP project manager tosucceed. Creating an environment that supports success is a major step towards helpingthe ERP project teams succeed. Everybody needs to work together and support each other;this includes not only the ERP implementation team but also vendors (suppliers) andcustomers.Always encourage practice in planning. ERP roadmap is used to manage theimplementation and therefore must be kept up-to-date. If the plans that are created at thebeginning of the project are put in a file and forgotten, why bother creating them in the firstplace. ERP Tip: Page 39 of 400
  39. 39. ERP Book Excerpts – Second Edition July 2012There should be focus on implementation control, not just reporting. Sometimes it is alsonecessary to report if things are going as per plan. This is called positive reporting.Keeping quiet and not reporting is not good. Most ERP project fails because of lack ofcommunication or incomplete communication. Sometime people are afraid to tell that theyhave not done the task or failed to keep the deadline. In short, email should be sent aboutevery activity, milestone, and status to all stakeholders. This will ensure that people(resources) know where their business unit or department fits into the plan. Page 40 of 400
  40. 40. ERP Book Excerpts – Second Edition July 2012Roadmap“If you fail to plan, may be you plan to fail”.Stakeholders:Individuals, ERP implementers, and ERP user organization are all stakeholders. They areactively involved in the ERP project. Their interest may be affected by the ERP project.Who will make the roadmap?The chief of ERP project, ERP coordinator along with ERP implementation team will preparethe roadmap.Prerequisites: 1. List down tasks 2. Mark milestones 3. Fix the project start date 4. Write duration for each task 5. Identify resource for each task 6. Define predecessorThe following is a sample plan showing various milestones and tasks. Please note thesequence of the task. The numbers of days are only for the example. This will depend onvarious factors such as resources allocated to task, data readiness, and availability ofresource during the project implementation, IT infrastructure and so on. Page 41 of 400

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