2. ENTERPRISE RESOURCE
PLANNING -ERP
• ERP is an information system that attempts to
integrate all departments and functions across
a company onto a single computer system that
can serve all those different department’s
particular needs.
• It support the basic internal business
processes of a company.
3. ERP HISTORY
• 1960’s - Systems Just for Inventory Control.
• 1970’s - MRP – Material Requirement Planning
(Inventory with material planning & procurement)
• 1980’s - MRP II – Manufacturing Resources
Planning (Extended MRP to shop floor
&distribution Management.)
• Mid 1990’s - ERP – Enterprise Resource Planning
(Covering all the activities in Enterprise)
• 2000 onwards – ERP II – Collaborative Commerce
(Extending ERP to external
4. REASONS FOR ADOPTING ERP
• Integrate financial information.
• Integrate customer order information.
• Standardize and speed up operations processes.
• Reduce inventory.
• Standardize Human Resources information.
• Common definitions.
• Common database.
• Update one module, automatically updates others.
5. ERP COMPONENTS
• Business Intelligence
• Supply Chain Management
• Human Resource Management
• Manufacturing Operations
• Integration
6.
7. LIMITATIONS OF ERP
• High cost.
• Forced change of processes.
• Very complex software.
• Lack of trained people.
• Flexibility of software system upgrades.
• Implementation timelines.
• Availability of internal technical knowledge and
resources.
• Education and training.
• Implementation strategy and execution.
8. COSTS OF ERP
• Training
• Integration and testing
• Data conversion
• Data analysis
• Consultants
• Replacing best and brightest staff after
implementation
• Implementation teams can never stop
• Waiting for ROI
• Post-ERP depression
10. BENEFITS OF ERP SYSTEMS
• Reduce stock to a minimum
• Enlarge product assortment
• Improve product quality
• Provide more reliable delivery dates and
higher service to the customer
• Efficiently coordinate global demand, supply
and production
11. ERP IMPLEMENTATION
• Biggest IT project that most companies ever
handle
• Changes the entire company, and Has
repercussions in all departments and divisions
of the organization.
• It is essential that all the key players
understand the scope of the project .
14. RISKS WITH ERP
IMPLEMENTATION
• Expensive
• Time-consuming (can take months to years)
• Great risk for the organization
• Transfer of Knowledge
• Acceptance with the company
15. CAUSES OF ERP FAILURES
• Business mangers and IT professionals
underestimate the complexity of the planning,
development, and training needed
• Failure to involve affected employees in the
planning and development phases
• Trying to do too much too fast in the
conversion process
• Failure to do enough data conversion and
testing
16. BEST PRACTICES OF ERP
IMPLEMENTATION
• Change Management
• Extensive Education and Training
• Data Clean up and Data Integrity
• Implementation is viewed as an ongoing
process.
