Introduction To ERP template

1. Introduction to ERP
1

2. Objectives
After completing this chapter, you will be able to
understand:
• Enterprise
• Business Process
• Business Functions
• Enterprise Resource Planning (ERP)
• Benefits of ERP
• Challenges of ERP
• ERP Career Path
2

3. Enterprise
• An enterprise is a company or business, often a
small one.
• Enterprise is the activity of managing companies
and businesses and starting new ones.
• An Enterprise is a group of people with a
common goal, which has certain resources at
its disposal to achieve that goal. The enterprise
acts as a single entity.
3

4. 4

5. Business Scenario
It has many departments or business units
These departments or business units
continuously communicate and exchange data
with each other
The success of any organization lies in effective
communication, and data exchange, within
these departments, as well as associated third
party such as vendors, outsourcers, and
customers.
5

6. Business Scenario
6

7. Business Functions
• Business function is an operation that is
performed routinely to carry out a part of the
mission of an organization.
• Activities specific to a functional area of
operation
– Marketing and Sales
– Supply Chain Management
– Accounting and Finance
– Human Resources
7

8. 8
Examples of functional areas of operation and their business functions
Business Functions

9. Business Process
• Businesses take inputs (resources) and transform
these inputs into goods and services for customers.
• Business Process is a collection of activities that takes
one or more inputs and transform them into outputs
that is of value to a customer.
• Managing inputs and business processes effectively
requires accurate and up-to-date information.
• Every process is triggered by some event, such as
receiving a customer order or recognizing the need to
increase inventory. The specific steps in the process
are completed in different functional areas.
9

10. Business Process (Added Value)
The difference between the cost of purchasing
raw materials and the price the finished goods
are sold for
Cost of
inputs/materials
Value of output of
finished goods,
includes the services,
and ‘extras’ added
during production
Production process
adds value

11. Business Process
• BP are the way a company does things
– Process invoice, Service customers, Take orders….
• Performed in sequence of tasks or parallel activities
• By one or more individuals and/or computer applications
• Clear definition of roles, responsibilities, expected time
frames and objectives (Who, What, When, How, Why,
Where)
• Takes one or more input and creates an output
• Has a value to an organization/customer.
• Connected to other processes
• Performance can be measured
• Modified, redesigned, improved

12. Business Process Components
Every BP has well defined goals.
Every person performing a process should work towards a common goal.
12

13. Business Process Example
• Production or manufacturing process (make)
– manufacture to inventory
• Procurement or purchasing process (buy)
– procure to pay
• Fulfillment process (sell)
– order to cash
13

14. Business Process Example
• Make iPods (production)
– What parts are required to make an iPod
– How to assemble these parts
– Who performs these steps
• Buy parts (procurement)
– What are some steps in the buying process
– Who performs these steps
• Sell iPods (Fulfillment)
– What are some steps in the selling process
– Who performs these steps
14

15. Business Process Example
Procurement
• Create Master Production Schedule (MPS)
• Create Bill of Materials (BOM)
• Check material availability
• Create purchase requisition for materials not in
stock
• Create Purchase Order (PO)
• Send PO to suppliers
• Receive and inspect materials from suppliers
• Update inventory database
• Receive and verify invoice from suppliers
• Send payment to suppliers 15

16. Exercise
The fulfillment process (Sell)
16

17. The Fulfillment Process (Sell)
17

18. Business Process
18

19. Business Process
• For example, when a retailer (customer) places an
order for bicycles, the manufacturer (seller) uses a
specific process to ensure that the correct products
are shipped to the customer in a timely manner and
that payment for the order is received. These process
steps can include validating the order, preparing
the shipment, sending the shipment, issuing an
invoice, and recording the receipt of payment. The
sales department receives and validates the customer
order and passes it on to the warehouse, which
prepares and ships the order. The accounting
department handles the invoice and payment steps.
19

20. 20
Sample Business Processes
Related to the Sale of a Personal
Smartphone

21. Recruiting Process – fill a vacancy
Exercise
21

22. Recruiting Process – fill a vacancy
•Identify a vacancy
•Develop description of the job profile
•Advertise ‐ soliciting of applications through
advertisement, campus career fairs, personal contacts etc.
•Scan resumes and applications
•Review applications
•Administer written test, oral test, personality test
•Select applicants based on qualification, experience,…
•Interview applicants (telephone/personal).
•Conduct background check, reference check, etc.
•Offer job
•Goal ‐ Hire a successful candidate 22

23. Functions Vs. Process Business
Model
23

24. Functions Vs. Process Business
Model
• Suppose a customer’s product is damaged during
shipment.
• Accepting the damaged item by Customer Service
department is a business function.
• The steps involved in actual receiving, repairing, and
redelivery of the product is a business process.
• A business function could be a part of a business
process
Business processes represent the flow of data
through a series of tasks that are designed to result
in specific business outcomes.
24

25. Business Model-Then and Now
25

26. Functional Vs. Process View
26

27. Functional Business Model
27

28. Business Process Model
28

29. Business Process Model
29

30. Integration of Business Functions

31. Information Systems-Then and Now
31

32. Decentralized System Problems
32

33. Decentralized System Problems
• Numerous disparate information system
generates individually over time which are difficult
to maintain
• Integrating the data is time and money
consuming
• Inconsistencies and duplication of data
• Lack of timely information leads to customer
dissatisfaction , loss of revenue and reputation
• High Inventory, material, and human resource
cost.
33

34. Centralized Systems
34

35. Centralized Systems
1)Data is maintained at a central location and is
shared with various Departments
2) Departments have access to information or data of
other Departments
35

36. Centralized Systems
• Key benefits of the centralized system are:
• It Eliminates the duplication, discontinuity and redundancy in
data
• Provides information across departments in real time.
• Provides control over various business processes
• Increases productivity, better inventory management ,
promotes quality , reduced material cost, effective human
resources management, reduced overheads boosts profits
• Better customer interaction and increased throughput. It also
improves customer service
• Hence, a centralized enterprise management system is
required.
36

37. • Single, integrated IS that uses a single database, help
various functional departments share information and
communicate with each other.
• Enterprise systems integrate business process in
manufacturing and production, finance and accounting,
sales and marketing, and human resources into a
single software systems
• Information entered in one process is immediately
available for other processes
• Enterprise systems provide a technology platform where
organization can integrate and coordinate their major
internal business process.
• Enterprise Resource Planning (ERP) systems is also
known as Enterprise Systems .
Enterprise Systems/ERP

38. • Enterprise resource planning systems or enterprise systems
are software systems for business management,
encompassing modules supporting functional areas such as
planning, manufacturing, sales, marketing, distribution,
accounting, financial, human resource management, project
management, inventory management, service and
maintenance, transportation and e-business.
• Enterprise resource planning (ERP) systems are the world’s
largest and most complex ES. ERP systems focus primarily
on intra-company processes— that is, the operations that are
performed within an organization—and they integrate
functional and cross-functional business processes. Typical
ERP systems support Operations (Production), Human
Resources, Finance & Accounting, Sales & Distribution, and
Procurement.
Enterprise Systems/ERP

39. Enterprise Systems/ERP
An Enterprise
is a group of
people with a
common
goal, which
has certain
resources at
its disposal to
achieve that
goal.
Resources
included are
money and
all other
things that
are required
to run the
enterprise.
Planning is
done to
ensure that
nothing
goes
wrong.

40. Traditional View of Systems

41. Enterprise Systems/ERP

42. 42

43. Business Process using Functional
Systems before ERP
43

44. Business Process using ERP
44

45. Legacy System to ERP System
45

46. Legacy Systems Vs. ERP Systems
46

47. Offices Before ERP

48. Offices After ERP

49. • Business value of enterprise systems
– Integrate Business Processes
– Gain strategic advantage
– Replace legacy systems (not able to support growth)
– Increase operational efficiency
– Standardize IT infrastructure & business processes
– Provide firm-wide information to support decision
making
– Include analytical tools to evaluate overall
organizational performance
– Keep closer tabs on global operations
Enterprise Systems/ERP

50. • Business value of enterprise systems
– Single data entry points leading to less errors &
reconciliation time
– Right Information at the Right Time
– Enable rapid responses to customer requests for
information or products
– Improve interaction & communication with employees
and partners
– Complete Inventory visibility and lowering of carrying
cost
– Automated Product Costing & Financial system
– Right Information at the Right Time
Enterprise Systems/ERP

51. 1-51

52. 52
• Difficult to build: Require fundamental changes in
the way the business operates
• Technology: Require complex pieces of software
and large investments of time, money, and
expertise
• Centralized organizational coordination and
decision making: Not the best way for the firms to
operate
• Lack of business and technical knowledge
• Insufficient training of end-users.
Challenges of Enterprise
Systems/ERP

53. Emerging Trends and future
directions in ERP
• Enhancement of cloud-based solution
• Popularity of i-ERP
• Enhancement of mobile application
• Advanced analytics
• Real-time data for accuracy
• High concentration on digital marketing
• More user-friendly and personalized solutions
• Enhancement of additive manufacturing
• Increase use of IoT with ERP
• More flexible with a two tier model

54. Why ERP? Career Path –
You want to earn a master or doctorate degree?
SAP ERP Event
54
http://scn.sap.com/thread/1479427

55. Why ERP? Career Path –
You want to earn a master or
doctorate degree?
55

56. Why ERP? Career Path –
You want to earn a master or
doctorate degree?
56

57. ERP Career Path

58. ERP Career Path

59. ERP Career Path
• Functional Consultants
• Technical Consultant
• Techno-functional consultants

60. ERP Career Path
Types of SAP consultants
• Developer consultant: This type of SAP consultant is
responsible for coding Java and ABAP programs.
• Business and sales consultant: Business/sales SAP
consultants focus on winning projects at the customer level.
• Functional consultant: This type of SAP consultant works
closely with developers to create custom code for ABAP
programs, customizing SAP to meet the client
requirements.
• SAP basis consultant: An SAP basis consultant helps to
install, maintain and fine-tune databases and SAP servers.
SAP basis consultants may have other responsibilities as
well depending on the size of the project.

61. ERP Career Path

62. How do I step my foot in the world of ERP?
If you work in a company that plans to implement ERP system, then
you should strive to be part of implementation team. You will gain
invaluable experience by going through all the five phases just
covered and learning what efforts and activities each phase entails.
Your biggest asset will be your in-depth and comprehensive
business process knowledge of your area of working.
If and when you come to know that a company plans to implement
ERP system soon, try to join that company and be a part of the
implementation team. You can improve your chances of being hired
in such a company if you get the necessary training and certification
to stand out from the crowd.
If you want to make a consulting career in ERP then try to find
opportunities available in several authorized consulting firms in
Bangladesh. Your chances of getting a break in consulting fields
improve if you acquire the necessary training and attain
certification from these consulting firms.
ERP Career Path

63. Thank
You