Definition of enterprise resource planning (ERP)
Enterprise resource planning (ERP) refers to a type of software that organizations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain
4. Introduction
A. About me
B. About this seminar
i. It is free, More theory based not practical (no software demonstration), mixed
audience
ii. Time is too short (I am afraid of how to manage time), Lack of Adequate Planning
iii. Poor Presentation slide (I don’t have graphic design skills, sorry for this);
iv. It should be interactive and participative, must not be monotonous and boring
C. Objectives of the seminar
• Knowledge and experience Sharing (both of mine and yours), not to make you
understand anything rather raise some important issue in front of you, Building
Awareness
D. Scope of this seminar
Overviewing; not possible for go into details
End of Session 1
6. ERP is short for enterprise resource planning. ERP is
business data process management software system
that allows an organization to use a system of Integrated
Applications to manage the business and automate
many back office, (like Accounts, Sales, purchase)
functions related to technology, services and human
resources
Brief Definition of ERP
7. • Some other type of Information System
i. Accounting Information System
ii. Library Management System
iii. School Management System
iv. CRM/SCM
ERP is just a another
Information System
8. What is Information System (IS)?
Definition and Functions of IS
1. Storing Data (Amount of an Invoice, Amount of a Debit
Voucher)
2. Processing Data into Meaningful Information (Total Sales or
Net Income)
Input Data
Stores and
Processes
Output
Information
This is an Information System
9. • It is a Strategic Resource (There are other four common economic
resources; Land, Labor, Capital and Organization)
– It provides Competitive Advantage/Edge which is the critical
success factor in the long run
• Information is knowledge and knowledge is Power
• Right Information at right time for best business
decision – Information is for decision making
The Value of Information
10. 1. Transaction Processing System (TPS)
a. Order processing, Users are sales man
2. Management Information System (MIS)
a. Users are operational managers – Sales Manager, Store Manager
3. Decision Support System (Expert System/BI)
a. User are top level management like CFO, COO or CMO
4. Executive Support System (ESS) – for Strategic
Management
a. Users are Board of Directors, CEO, Investors
Stages or Levels of
Information System
Levels are shown graphically in next slide
12. An ERP solution, basically integrates both internal
and external communication with a single system. That
is, ERP solution can collaborate information and
processes (both external & internal) for various
business functions like manufacturing, finance &
accounts, human resource and the supply chain
management. ERP is valuable for any business for its
ability to provide accurate and updated data across
multiple functions
An introduction to ERP
13. • The term ERP was coined in 1990 by Gartner, but its roots date to the
1960s. Back then, the concept applied to inventory management and
control in the manufacturing sector. Software engineers created programs
to monitor inventory, reconcile balances, and report on status. By the
1970s, this had evolved into Material Requirements Planning (MRP)
systems for scheduling production processes.
• In the 1980s, MRP grew to encompass more manufacturing processes,
prompting many to call it MRP-II or Manufacturing Resource Planning. By
1990, these systems had expanded beyond inventory control and other
operational processes to other back-office functions like accounting and
human resources, setting the stage for ERP as we've come to know it.
• Today, ERP has expanded to encompass business intelligence (BI) while
also handling "front-office" functions such as sales force automation (SFA),
marketing automation and ecommerce. With these product advancements
and the success stories coming out of these systems, companies in a broad
range of industries—from wholesale distribution to ecommerce—use ERP
solutions.
A Brief History of ERP
15. Top ERP Vendors worldwide now
*There are thousands of ERP vendors worldwide
16. 1. Service ERP (Transport Business Management; Air, Ship)
2. Trading ERP
3. Manufacturing ERP
Classification of ERP – Business Type
17. 1. Routine Reports
a) MIS Reports (Monthly Sales, Customer Balance Summary, Depot Wise
Inventory Status)
b) DSS Reports (Item Wise Profitability Analysis, Production planning,
EOQ, Supplier Evaluation etc.)
c) Dashboard/KPI (Growth Analysis)
2. Exception Reports
a) Exception is exception (It may be prepared in Excel as and when required)
Types of Report and ERP
18. Why ERP?
1. Central Storage of Business Data
2. Integration of all Business data into a single system
3. Elimination of redundant data and communications lags
4. Elimination of Manual Report Preparation
5. Information Security
6. Data Security
7. It is a Strategic Resource
8. It provides Competitive Advantage
9. Data to be entered once and then used throughout the
organization - Double Entry System
10. Above list is not the final
19. 1. Ensures Book Keeping as well as Accounting
a) It ensures the Double Entry System in Book Keeping
b) It does the job of Accountants like Expert; Preparing Income
Statement, Balance Sheet, Cash Flow Statement
2. Serves Internal Auditing Purposes
a) It serves the purpose of Internal Auditing
3. Introduces Data Driven Management Practices
and Decisions Making
a) Changing the Business Management Style
Some Most Important Issues
22. How do ERP Systems Work?
Central
Database
Reporting
Applications
Human
Resource
Management
Applications
Financial
Applications
Manufacturing
Applications
Inventory
And Supply
Applications
Human
Resource
Management
Applications
Service
Applications
Sales and
Delivery
Applications
Sales Force
And Customer
Service Reps
Customers
Back-office
Administrators
And Workers Suppliers
* It would have been more understandable, if I could show you a practical solution
27. • Same data server can be used by
i. Desktop Applications
ii. Web Applications
iii. Mobile Applications
Concept of Hybrid Technology
28. 1. It should be modular based
2. It should be multiuser system and online
3. It should be distributed and decentralized
4. Access and User Rights Control
5. Configuration and Customization Options from front end
6. Transaction Approval System
7. Real-time Data Processing
8. Scalability
9. Flexibility
10. Cost effective
11. Multi Currency Options
12. Drill Down Reports
13. Ease of Use and User Friendly
Characteristics of a Good ERP
29. * Though there is no reliable statistics available about the market share in Bangladesh
1. Big Manufacturing Concern (Excel, Tally, SAP, Oracle, One
or more than stand alone solutions, Customized Solutions)
2. Medium Manufacturing (Excel, Tally, One or more Stand
Alone Applications, Some Customized ERP)
3. Small Manufacturing (Manual, Excel, Tally, Other stand alone
applications)
Manufacturing ERP
Bangladesh Context
30. End of Session 2
1 There is a potential market for customized
manufacturing ERP (in Bangladesh way and in
affordable price)
2 Improvement in Business Process Management
System will have impact on individual organizations
as well as on Macro Economy
3 Primarily RMG and Textile sector can increase their
cost efficiency by implementing perfect ERP
customized for them
My Observations
32. 1. Paper Based Manual System
2. Spread Sheet Software like MS Excel
3. Tally/Other Stand Alone Solutions (Inventory
Management System, Payroll Management System, Sales Management
System)
4. ERP/SCM/CRM
5. Management view about report /MIS/IT
Department – an example
Bangladesh Business
Management Practices & View
33. 1. You Have Lots of Different Software for Different
Processes
2. You Don't Have Easy Access to Information About
Your Business or Not Easily Available
3. Accounting Takes Longer and Is More Difficult
4. Sales and the Customer Experience Are Suffering
5. Your IT Is Too Complex and Time-Consuming
6. Signs are not Limited to above 5
Does my organization need to go for an ERP?
Top 5 Signs
34. CS-1 Lovello Ice-cream
• Sales and Receivable management
• From Excel to ERP (Before and After ERP)
CS-2 Sobuj Saya Abashon Limited
• From Paper/Excel to ERP
Case Study
35. 1. What type of information system do I need
a) Need for detailed requirement specification
2. What are the scopes
3. What is the man power status
4. What is company infrastructure
5. What are the top Managements’ views
Need Assessment
36. 1. Information System Planning must be aligned
with company Business/Management
Strategy
2. It should be long term
Need for
Strategic Information System Planning
SISP
37. 1. Revising the Document Formats
2. Changes in Voucher Type
3. Changes in Document/Voucher/Bills Approval
System
4. Changes in Attendance Recording System
5. Revising in the conduct of business process (Sales
Order Taking and Invoicing, Distribution)
6. The list is not limited to above only
ERP and Business Process Reengineering (BPR)
38. 1. Appointing a or Group of Consultants
2. Appointing Human Resources from the company
3. Initiate a Project of Acquiring ERP
Best Corporate Practices
39. 1. Availability of packaged solution that fits your requirement
2. Cost Effectiveness
3. Do you anticipate many changes as the business grows?
a) If many changes then Custom
b) If no changes then Packaged
4. Is your company willing to change the way it does business
to accommodate the software (Packaged Solution)?
5. Urgency; if it is needed right now then may be standard else
custom?
6. Required Human Resources
1. If Available then Custom else Packaged
Make or Buy – Packaged VS Custom
40. • SAP/Oracle and other big solutions
• Sage, Some Indian and Other Solutions
• Tally
What are options of Packaged
Solutions
41. 1. In House Development
2. Outsourcing
What are Options of Custom Solutions?
42. • Information System Development Methodology
i. Software Development Life Cycle (SDLC)
ii. Prototyping
iii. Other Methodology
In House Development
44. 1. Programming Languages and Frameworks
2. A Database
3. A Reporting Tools
ERP/IS Development Tools
45. • For Browser Based Applications (Scripting Language)
– ASP .NET (Microsoft)
– Java (Sun Micro Systems)
– PHP (Open Source)
– And many more
• For Desktop Applications
– VB .NET (Microsoft)
– C# (Microsoft)
– Java (Sun Micro Systems)
– And many more
Language Options
46. Database Options
Database Company
Oracle Oracle Corporation
MS SQL Server Microsoft
MS Access Microsoft
MySQL Open Source
PostgreSQL Open Source
DB2 IBM
Sybase Sybase/SAP
48. 1. What is the vendor’s situation and reputation?
2. What technologies does the ERP solution offer?
3. What are the system’s functionalities and ease of
use?
4. What will be the true cost of the ERP solution?
5. What kind of support and training will be provided?
ERP Software Selection Criteria and
Vendor Checklist
49. 1. Yes (In some respect)
a) Integration Aspect
b) Enterprise Wide
c) Modular Base, Online, Multiuser
2. No (In some respect)
a) Module Design
b) Input/output Design
c) Menu Navigation
d) Terminologies
Is there any Standard for ERP?
50. • System Analysis and Design are the key
factors
– Database Modeling
– Front end management (Menu navigation)
• Code implementation is not
– Availability of Frameworks and OOP
Approach
Success Factors in Building Custom ERP
or IS
51. 1. Poor Planning with Low Executive Involvement and
Support
2. Change Management & Inadequate Training
3. Poor Selection & Misalignment with Business
Processes
4. Underestimating & Inadequately Assigning Resources
5. Viewing ERP as a Simple IT Project
6. This list is not limited to above five
Top 5 Mistakes made when
implementing an ERP system and
Causes of Failure
52. 1. Creating New Department as Information
Department
2. Creating the new role of CIO
Concept of Information Department
and role of CIO
53. 1. Make (In House or Outsourcing) or Buy
Decision
2. Selecting Perfect Vendor
3. Choosing Solution that fits best
4. Perfect Cost Benefit Analysis
5. Ensuring Higher Return than Investment
6. Successful Implementation
7. Updates and Maintenance
Challenges of CFO/Head of ERP Project
54. MS Excel Database & SQL Knowledgebase
Data
Warehousing
Need for look beyond the horizon?
We are here
We are
Getting
Introduced with
Not Much
Familiar With
What is that?
End of Session 3
56. 1. Building Customized Industry Specific Manufacturing ERP
and Role of CMAs (Who else do it?)
A. Job/Order Costing
B. Batch Costing
C. Processing Costing
2. Application of Management Accounting and Building
Decision Support System (Who else do it for us?)
A. Profitability Analysis
B. Key Performance Indicator
Role of CMAs
57. 1. Accounting is our common advantage; what can
be the competitive advantages to compete with
other professionals?
A. English and Communication Skills
B. Information Technology (can be our biggest Competitive Advantage)
C. Leadership Quality
D. Other
CMAs’ Competitive Advantages
58. 1. ICMAB can create a Team of Members who will work on and
develop the standards for manufacturing ERP (Some common
features and characteristics that a system should posses)
2. ICMAB can start certifications for manufacturing ERP for
Bangladeshi Software Company with association of BASIS
3. Doing Cost Audit of Manufacturing ERP
a) Audit Rules
b) Guidelines
4. ICMAB can take initiative and update its syllabus with
Information System Auditing (for Fully Automated Organization)
Role of ICMAB
End of Session 4