Enterprise Resource Planning(ERP)


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Enterprise Resource Planning(ERP)

  1. 1. Enterprise Resource Planning (ERP) Presented By: Makansingh Chauhan
  2. 2. 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.
  3. 3. 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
  4. 4. 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.
  5. 5. 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)
  6. 6. Components OF ERP!
  7. 7. 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.
  8. 8. 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.
  9. 9. 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!
  10. 10. 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.
  11. 11. Vendors ERP Vendors
  12. 12. 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
  13. 13. 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.
  14. 14. Do you currently have an ERP package?
  15. 15. 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.
  16. 16. 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
  17. 17. 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)
  18. 18. 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.
  19. 19. Disadvantages of ERP  High Software cost  Consulting Fees.  Forced change of processes.  Very complex software  Lack of trained people  Not Internet-ready
  20. 20. 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
  21. 21. 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
  22. 22.  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 ?
  23. 23. 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.
  24. 24. 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
  25. 25. "Excellence is not a skill. It is an attitude." Thank you :)