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.

1. Enterprise Resource
Planning (ERP)
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2. • 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.
• “Integration” is the key word for ERP implementation.
What is ERP?

3. What is ERP?
• It may also integrate key customers and suppliers as part
of the enterprise’s operation.
• It provides integrated database and custom-designed
report systems.
• It adopts a set of “best practices” for carrying out all business
processes.

4. Evolution of ERP

5. Major Reasons for Adopting ERP
• Integrate financial information
• Integrate customer order information
• Standardize and speed up operations processes
• Reduce inventory
• Standardize Human Resources information

6. 6
An ERP Example: Before ERP
Customers
Customer
Demographic
Files
Sales Dept.
Vendor
Orders
Parts
Accounting
Accounting
Files
Purchasing
Purchasing
Files
Order is placed
with Vendor
Invoices
accounting
Inventory
Files
Warehouse
Checks for Parts
Calls back “Not in stock”
“We ordered the parts”
“We Need parts #XX”
“We ordered the parts”
Sends report
Sends report
Sends report
Ships parts

7. 7
An ERP Example: After ERP
Database
Customers Sales Dept.
Purchasing
Warehouse
Accounting
Vendor
Inventory Data
If no parts,
order is placed
through DB
Orders
Parts
Order is submitted
to Purchasing.
Purchasing record
order in DB
Order is placed
with Vendor
And invoices accounting
Financial Data exchange;
Books invoice against PO
Books inventory
against PO
Ships parts

8. 8
Who are the main ERP vendors?
• Baan
• JD Edwards
• Oracle
• PeopleSoft
• SAP

9. ERP Implementation Phases
4 Major Phases:
• Concept/initiation
• Development
• Implementation
• Closeout/Operation and maintenance

10. Major Challenges to ERP Implementation
• Limitations of ERP technical capabilities
• Inconsistency with existing business processes
• Costs
• Implementation strategy and execution
• Resistance to change

11. Potential Benefits of ERP
• Internal Benefits
• A real-time system
• Increased productivity
• Reduced operating costs
• Improved internal communication

12. Potential Benefits of ERP
• External Benefits
• Improved customer service and order fulfillment
• Improved communication with suppliers and
customers
• Enhanced competitive position

13. 13
Best Practices of ERP Implementation
• A Business Strategy aligned with Business Processes
• Top-Down Project Support and commitment
• Change Management

14. Best Practices of ERP Implementation Cont..
• Extensive Education and Training
• Data Clean up and Data Integrity
• Implementation is viewed as an ongoing process

15. 15
Conclusion
• The benefits of a properly selected and implemented ERP
system can be significant.
• An average, 25 to 30% reduction on inventory costs; 25% reduction on
raw material costs.
• Lead-time for customers, production time, and production costs can
be reduced.
• BUT cost of implementing can be quite high and risks are
great.

16. Question?

17. THANKYOU!