DEFINATION OF ERP Software solution that addresses the enterprise needs taking the process view of an organization to meet the organizational goals tightly integrating all functions of an enterprise.
WHAT IS ERP? ERP systems are the software tools used to manage enterprise data. 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.
A Typical StoryManufacturing Finance My growth will be OK . No? Corporate office Sales Group Human Resource
WHAT DOES ERP INTEGRATE? Databases Applications Interfaces Tools
Evolution of ERP systems Types of systems Time Reorder point 1960s Material requirement 1970s planning (MRP) Manufacturing resource 1980s planning (MRP-II ) Enterprise resource 1990s and planning (ERP) onwards
Why ERP? Business Customer satisfaction Business Development- new areas, products, services Ability to face competition Efficient processes required to push the company to top gear IT Present software does not meet business needs Obsolete hardware/ software difficult to maintain
ERP Implementation phases1. Project Planning2. Gap Analysis3. Business Process Re-engineering (BPR)4. Configuration5. Project Team Training6. Testing7. End User Training8. Going live9. Post-Implementation
1. Project Planning Designs the implementation process Project plan is developed. Roles are identified and responsibilities are assigned. This phase will decide when to begin the project, how to do it and when the project is supposed to be completed.
2. Gap Analysis The gap between the existing company requirements and what the ERP package is offering is analyzed. When the ERP package does not meet the company’s full requirements then the company can simply agree to live without a particular function or one can opt for :- a) Upgrade, or b) Identifying a third party product that might fill the gap, or c) Altering the ERP source code.
4. Configuration A prototype of the actual business processes of the company is used for thorough testing of the model in a controlled environment. Configuring reveals not only the strengths of a company’s business process but also- and perhaps more importantly - its weaknesses.
3.Business Process Reengineering In-depth study of existing systems/processes is required before ERP is considered. This study brings out deficiencies of the existing system/process. BPR attempts to re-structure and re-organize the human resources, functional areas, Man- Machine interfaces in the organization. Hence BPR attempts to maximize productivity
5. Implementation Team Training This is the phase where the company trains its employees to implement and later, run the system. After implementation, the company to be self-sufficient in running the ERP system, it should have a good in-house team that can handle the various situations.
6. Testing This is the phase where one try to break the system. The test cases must be designed specifically to find the weak links in the system and these bugs should be fixed before going live.
7. End-user Training In this phase the actual users of the system will be given training on how to use the system. The employees who are going to use the new system are identified. Their current skills are noted and based on the current skill levels, they are divided into groups. Then each group is given training on the new system.
8. Going live The system is officially proclaimed operational. Once the system is ‘live’, the old system is removed, and the new system is used for doing business.
9. Post implementation phase There should be people, within the company, who have the technical prowess to make the necessary enhancements to the system as and when required. The system must be upgraded as and when new versions or new technologies are introduced.
BENEFITS OF ERP Reduction of lead time Reduction in cycle time Improve resource utilization Better customer satisfaction Improved supplier performance Increase flexibility Reduced quality costs On time delivery Better analysis and planning capabilities
DISADVANTAGES OF ERP Cost is very high for implementation of ERP package Time 12-18 months implementation 1-3 years real transformation Training Acceptance Everyone gets brought down to the same knowledge level
HOW ERP HAS AFFECTED CONSUMERS? Consumers demands are met by faster order to shipping dates Tracking information on orders is available to consumers Consumers can easily view inventory, sale prices, delivery dates from the company web page Painless electronic transactions
SAP SAP is an ERP (Enterprise Resource Planning) system SAP = Systems, Applications and Products in Data Processing German Based Company One of Largest Independent Software Vendor in the World ERP Market Leader (SAP R/3 and mySAP ERP) 80% Fortune 500 Companies Use SAP Over 18,500 Customers in 120+ Countries Over 12 million users
SAP application modules Financial Accounting – collects all the data in the company relevant to accounting. Asset Management – manage and supervise individual aspects of fixed assets. Controlling – coordinating the contents and procedures of a company’s internal processes. Production Planning – plan and control manufacturing activities. Materials Management – supports the procurement and inventory functions occurring in day-to-day business operations.
SAP Application Modules Plant Maintenance and Service Management – provides planning, control and processing of scheduled maintenance and to ensure availability of operational systems. Quality Management – monitors and manages all processes relevant to quality assurance along the entire supply chain. Project System – designed to support planning, control and monitoring of long term highly projects with defined goal. Sales and Distribution – optimize all the activities carried out in sales and distribution. Human Resource Management – planning and managing company’s human resource.
System Wide Features of SAP Customizing – it is the configuring of the system to represent organization’s legal structure, reporting requirement and business processes. Organizational element – * Financial * Materials mgmt * Sales & distribution Master data – it is records that remain in the database over an extended period of time. Employee Self Service Classification Match codes Security
CONCLUSION ERP integrate all aspects of a company into one solution. There are both Pros and Cons, depending on the company one will out weigh the other. ERP is very time consuming and costly project. SAP is the major key vendor, with maximum market share. ERP has a strong future and will continue to grow.