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Enterprise Resource Planning (ERP): Introduction to ERP,
Implementation of ERP. Business process reengineering (BPR):
Process of BPR, Structural Change.
 Enterprise Resource Planning (ERP) is a software
that is built to organizations belonging to
different industrial sectors, regardless of their
size and strength.
 The ERP package is designed to support and
integrate almost every functional area of a
business process such as procurement of goods
and services, sale and distribution, finance,
accountings, human resource, manufacturing,
production planning, logistics & warehouse
management.
 During early phases of development,
integrated solutions were designed for
particular process areas such as −
 Material Management − the integrated
system was known as Material Requirement
Planning (MRP)
 Manufacturing − the integrated system was
known as Manufacturing Resource Planning
 Supports the integrated business process inside the organization.
 Improves capital planning and helps in executing organizational plans
and strategies.
 Helps speed up the decision-making process over the analysis of
accurate data.
 Helps extend the business network to wider domains, expanding the
products and services to reach more customers, suppliers, and
partners.
 Identifies operational risks to improve governance.
 Provides protection against organizational data breaches and security
threats to leakage of information.
 Makes the organization adaptable to the rapid changes in the
business process according to the needs.
 Gives long-term profit by providing means to increase the customer
base.
 1. Strategic Planning
 2. Procedure Review
 3. Data Collection and Clean-Up
 4.Training andTesting
 5. Go Live and Evaluation
 Set objectives.
 The objectives should be clearly defined prior to
implementing the ERP solution. ERP systems are
massive and you won’t be able to implement every
function.You need to define the scope of
implementation.
 Develop a project plan.
 The team should develop a project plan which includes
previously defined goals and objectives, timelines,
training procedures, as well as individual team
responsibilities.
 Assign a project team.
Assign a project team with employees from
sales, customer service, accounting,
purchasing, operations and senior
management.
 Examine current business processes and
information flow.
Have the team perform an analysis on which
business processes should be improved. Gather
copies of key documents such as invoices,
batch tickets and bill of lading for the analysis.
 Review software capabilities.
 Dedicate 3-5 days of intensive review of the software
capabilities for the project team.Train on every aspect
of the ERP software to fully educate the team on
capabilities and identify gaps
 Identify manual processes.
 Evaluate which processes that are manual and should
be automated with the ERP system.
 Develop standard operating procedures.
 These procedures should be documented. Make sure
that you modify the document as your SOPs change
 Convert data.
 You can’t assume 100% of the data can be
converted as there may be outdated information
in the system. Determine which information
should be converted through an analysis of
current data.
 Collect new data.
 Define the new data that needs to be collected.
Identify the source documents of the data.
 Review all data input.
 After the converted and manually collected data
is entered into the ERP database, then it must be
reviewed for accuracy and completeness.
 Clean-up data.
 Review and weed out unneeded information such
as customers who haven’t purchased in a while or
are no longer in business.
 Pre-test the database.
 The project team should practice in the test
database to confirm that all information is
accurate and working correctly.
 Verify testing.
 Make sure the actual test mirrors the Standard
Operating Procedures outlined in step 2, and
determine whether modifications need to made.
 Train theTrainer.
 It is less costly and very effective if you train the
trainer. Assign project team members to run the
in-house training.
 Perform final testing.
 The project team needs to perform a final test on
the data and processes once training is complete
and make any needed adjustments
 Develop a final Go-Live Checklist.
 Sample Final Go Live Countdown Checklist Sample
▪ Physical inventory process is complete.
▪ Beginning balance entry procedures are developed for
all modules.
▪ Any transition issues are addressed.
▪ Documents & modifications are tested thoroughly.
 Evaluate the solution.
 Develop a structured evaluation plan which ties back to
the goals and objectives that were set in the planning
stage
 It involves the radical redesign of core
business processes to achieve dramatic
improvements in productivity, cycle times
and quality.
 In Business Process Reengineering,
companies start with a blank sheet of paper
and rethink existing processes to deliver
more value to the customer.
 Refocus company values on customer needs
 Redesign core processes, often using
information technology to enable improvements
 Reorganize a business into cross-functional
teams with end-to-end responsibility for a
process
 Rethink basic organizational and people issues
 Improve business processes across the
organization
 Reduce costs and cycle time. Business Process
Reengineering reduces costs and cycle times by
eliminating unproductive activities and the employees
who perform them. Reorganization by teams
decreases the need for management layers,
accelerates information flows, and eliminates the
errors and rework caused by multiple handoffs.
 Improve quality. Business Process Reengineering
improves quality by reducing the fragmentation of
work and establishing clear ownership of processes.
Workers gain responsibility for their output and can
measure their performance based on prompt
feedback.
 “If you fail to plan, you plan to fail”. Planning and
Preparation are vital factors for any activity or event to be
successful, and reengineering is no exception. Before
attempting reengineering, the question ‘Is BPR necessary?’
should be asked?
 There should be a significant need for the process to be
reengineered.
 A cross-functional team is established with a game plan for
the process of reengineering.
 Another important factor to be considered is to understand
the expectations of your customers and where your existing
process falls short of meeting those requirements.
 Having identified the customer driven objectives, the
mission or vision statement is formulated.
 Before the reengineering team can proceed to
redesign the process, they should understand the
existing process.
 The important aspect of BPR (what makes BPR, BPR)
is that the improvement should provide dramatic
results.
 A large manufacturer spent six million dollars over a
period of one year in a bid to develop a parts-tracking
system and was all set to go online. Only then did he
realize that he had totally overlooked a small piece of
information – ‘the mode of transmission of
information between the scheduling staff and the
shop floor was through a phone call.’
 The objective of this phase is to produce one or
more alternatives to the current situation, which
satisfy the strategic goals of the enterprise.
 The first step in this phase is benchmarking.
“Benchmarking is the comparing of both the
performance of the organization’s processes and
the way those processes are conducted with
those relevant peer organizations to obtain
ideas for improvement”
 Having identified the potential improvements
we perform simulation and ABC to analyze
factors like the time and cost involved.
• The implementation stage is where reengineering
efforts meet the most resistance and hence it is by far
the most difficult one.
• The question that confronts us would be,’ If BPR
promises such breath taking results then why wasn’t it
adopted much earlier?’
• requirements for the construction of theTo-Be
components can be added and the result organized
into aWork Breakdown Structure (WBS).
• The benefit here is that we can now define the causal
and time sequential relationships between the
activities planned.
• A process cannot be reengineered overnight.
• very vital part in the success of every
reengineering effort lies in improving the
reengineered process continuously.
• Two things have to be monitored – the
progress of action and the results
Mis unit iv PIMR
Mis unit iv PIMR

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Mis unit iv PIMR

  • 1. Enterprise Resource Planning (ERP): Introduction to ERP, Implementation of ERP. Business process reengineering (BPR): Process of BPR, Structural Change.
  • 2.  Enterprise Resource Planning (ERP) is a software that is built to organizations belonging to different industrial sectors, regardless of their size and strength.  The ERP package is designed to support and integrate almost every functional area of a business process such as procurement of goods and services, sale and distribution, finance, accountings, human resource, manufacturing, production planning, logistics & warehouse management.
  • 3.
  • 4.  During early phases of development, integrated solutions were designed for particular process areas such as −  Material Management − the integrated system was known as Material Requirement Planning (MRP)  Manufacturing − the integrated system was known as Manufacturing Resource Planning
  • 5.  Supports the integrated business process inside the organization.  Improves capital planning and helps in executing organizational plans and strategies.  Helps speed up the decision-making process over the analysis of accurate data.  Helps extend the business network to wider domains, expanding the products and services to reach more customers, suppliers, and partners.  Identifies operational risks to improve governance.  Provides protection against organizational data breaches and security threats to leakage of information.  Makes the organization adaptable to the rapid changes in the business process according to the needs.  Gives long-term profit by providing means to increase the customer base.
  • 6.  1. Strategic Planning  2. Procedure Review  3. Data Collection and Clean-Up  4.Training andTesting  5. Go Live and Evaluation
  • 7.  Set objectives.  The objectives should be clearly defined prior to implementing the ERP solution. ERP systems are massive and you won’t be able to implement every function.You need to define the scope of implementation.  Develop a project plan.  The team should develop a project plan which includes previously defined goals and objectives, timelines, training procedures, as well as individual team responsibilities.
  • 8.  Assign a project team. Assign a project team with employees from sales, customer service, accounting, purchasing, operations and senior management.  Examine current business processes and information flow. Have the team perform an analysis on which business processes should be improved. Gather copies of key documents such as invoices, batch tickets and bill of lading for the analysis.
  • 9.  Review software capabilities.  Dedicate 3-5 days of intensive review of the software capabilities for the project team.Train on every aspect of the ERP software to fully educate the team on capabilities and identify gaps  Identify manual processes.  Evaluate which processes that are manual and should be automated with the ERP system.  Develop standard operating procedures.  These procedures should be documented. Make sure that you modify the document as your SOPs change
  • 10.  Convert data.  You can’t assume 100% of the data can be converted as there may be outdated information in the system. Determine which information should be converted through an analysis of current data.  Collect new data.  Define the new data that needs to be collected. Identify the source documents of the data.
  • 11.  Review all data input.  After the converted and manually collected data is entered into the ERP database, then it must be reviewed for accuracy and completeness.  Clean-up data.  Review and weed out unneeded information such as customers who haven’t purchased in a while or are no longer in business.
  • 12.  Pre-test the database.  The project team should practice in the test database to confirm that all information is accurate and working correctly.  Verify testing.  Make sure the actual test mirrors the Standard Operating Procedures outlined in step 2, and determine whether modifications need to made.
  • 13.  Train theTrainer.  It is less costly and very effective if you train the trainer. Assign project team members to run the in-house training.  Perform final testing.  The project team needs to perform a final test on the data and processes once training is complete and make any needed adjustments
  • 14.  Develop a final Go-Live Checklist.  Sample Final Go Live Countdown Checklist Sample ▪ Physical inventory process is complete. ▪ Beginning balance entry procedures are developed for all modules. ▪ Any transition issues are addressed. ▪ Documents & modifications are tested thoroughly.  Evaluate the solution.  Develop a structured evaluation plan which ties back to the goals and objectives that were set in the planning stage
  • 15.  It involves the radical redesign of core business processes to achieve dramatic improvements in productivity, cycle times and quality.  In Business Process Reengineering, companies start with a blank sheet of paper and rethink existing processes to deliver more value to the customer.
  • 16.  Refocus company values on customer needs  Redesign core processes, often using information technology to enable improvements  Reorganize a business into cross-functional teams with end-to-end responsibility for a process  Rethink basic organizational and people issues  Improve business processes across the organization
  • 17.  Reduce costs and cycle time. Business Process Reengineering reduces costs and cycle times by eliminating unproductive activities and the employees who perform them. Reorganization by teams decreases the need for management layers, accelerates information flows, and eliminates the errors and rework caused by multiple handoffs.  Improve quality. Business Process Reengineering improves quality by reducing the fragmentation of work and establishing clear ownership of processes. Workers gain responsibility for their output and can measure their performance based on prompt feedback.
  • 18.
  • 19.  “If you fail to plan, you plan to fail”. Planning and Preparation are vital factors for any activity or event to be successful, and reengineering is no exception. Before attempting reengineering, the question ‘Is BPR necessary?’ should be asked?  There should be a significant need for the process to be reengineered.  A cross-functional team is established with a game plan for the process of reengineering.  Another important factor to be considered is to understand the expectations of your customers and where your existing process falls short of meeting those requirements.  Having identified the customer driven objectives, the mission or vision statement is formulated.
  • 20.  Before the reengineering team can proceed to redesign the process, they should understand the existing process.  The important aspect of BPR (what makes BPR, BPR) is that the improvement should provide dramatic results.  A large manufacturer spent six million dollars over a period of one year in a bid to develop a parts-tracking system and was all set to go online. Only then did he realize that he had totally overlooked a small piece of information – ‘the mode of transmission of information between the scheduling staff and the shop floor was through a phone call.’
  • 21.  The objective of this phase is to produce one or more alternatives to the current situation, which satisfy the strategic goals of the enterprise.  The first step in this phase is benchmarking. “Benchmarking is the comparing of both the performance of the organization’s processes and the way those processes are conducted with those relevant peer organizations to obtain ideas for improvement”  Having identified the potential improvements we perform simulation and ABC to analyze factors like the time and cost involved.
  • 22. • The implementation stage is where reengineering efforts meet the most resistance and hence it is by far the most difficult one. • The question that confronts us would be,’ If BPR promises such breath taking results then why wasn’t it adopted much earlier?’ • requirements for the construction of theTo-Be components can be added and the result organized into aWork Breakdown Structure (WBS). • The benefit here is that we can now define the causal and time sequential relationships between the activities planned.
  • 23. • A process cannot be reengineered overnight. • very vital part in the success of every reengineering effort lies in improving the reengineered process continuously. • Two things have to be monitored – the progress of action and the results