ERP is an acronym for Enterprise Resource Planning, but even its full name doesn't shed much light on what ERP is or what it does. For that, you need to take a step back and think about all of the various processes that are essential to running a business, including inventory and order management, accounting, human resources, customer relationship management (CRM), and beyond. At its most basic level, ERP software integrates these various functions into one complete system to streamline processes and information across the entire organization.
The central feature of all ERP systems is a shared database that supports multiple functions used by different business units. In practice, this means that employees in different divisions—for example, accounting and sales—can rely on the same information for their specific needs.
ERP is an acronym for Enterprise Resource Planning, but even its full name doesn't shed much light on what ERP is or what it does. For that, you need to take a step back and think about all of the various processes that are essential to running a business, including inventory and order management, accounting, human resources, customer relationship management (CRM), and beyond. At its most basic level, ERP software integrates these various functions into one complete system to streamline processes and information across the entire organization.
The central feature of all ERP systems is a shared database that supports multiple functions used by different business units. In practice, this means that employees in different divisions—for example, accounting and sales—can rely on the same information for their specific needs.
Enterprise resource planning (ERP) is business management software that allows an organization to use a system of integrated applications to manage the business.
What is an ERP system? This guide explains what an ERP system is and how it works for your business.
Two primary concerns of any business are efficiency and profitability. This is basically what an ERP system is designed to optimize.
An ERP system allows you to perform the necessary money-making processes of your business as efficiently as possible.
To achieve a level of efficiency and profitability, a business aims to maximize it’s bottom line while keeping overhead costs low.
An ERP system provides a business with management software that fosters productivity.
The term “ERP” stands for Enterprise Resource Planning.
Basically, an ERP system is a shared database that reflects the moving parts of a company. This provides a much broader, top-down perspective of your business.
Installing an ERP system will grant you a much fuller picture of what is actually going on, in any given period of time.
Some processes in which you can gain some business insights include: sales, human resources, inventory, purchasing, finances, online ordering and many more buckets.
The main objective of an ERP system is to improve how your business resources are spent, and that means money and time. By taking a wide-view, and analyzing every aspect of your business, you will be able to decide if you are properly deploying your resources in a way that will drive maximum profitability.
We have to learn ERP because in future if we get to develop an ERP module or work on it, then we must understand the business needs that it is trying to fulfill.
When we clearly understand the functioning of a department in an enterprise, then we will be able to develop a module to automate it.
We also need to understand the interaction between modules.
Enterprise resource planning (ERP) is business management software that allows an organization to use a system of integrated applications to manage the business.
What is an ERP system? This guide explains what an ERP system is and how it works for your business.
Two primary concerns of any business are efficiency and profitability. This is basically what an ERP system is designed to optimize.
An ERP system allows you to perform the necessary money-making processes of your business as efficiently as possible.
To achieve a level of efficiency and profitability, a business aims to maximize it’s bottom line while keeping overhead costs low.
An ERP system provides a business with management software that fosters productivity.
The term “ERP” stands for Enterprise Resource Planning.
Basically, an ERP system is a shared database that reflects the moving parts of a company. This provides a much broader, top-down perspective of your business.
Installing an ERP system will grant you a much fuller picture of what is actually going on, in any given period of time.
Some processes in which you can gain some business insights include: sales, human resources, inventory, purchasing, finances, online ordering and many more buckets.
The main objective of an ERP system is to improve how your business resources are spent, and that means money and time. By taking a wide-view, and analyzing every aspect of your business, you will be able to decide if you are properly deploying your resources in a way that will drive maximum profitability.
We have to learn ERP because in future if we get to develop an ERP module or work on it, then we must understand the business needs that it is trying to fulfill.
When we clearly understand the functioning of a department in an enterprise, then we will be able to develop a module to automate it.
We also need to understand the interaction between modules.
ERP Introduction (Lecture)
Chapter 1-The Roots of Distribution Information Management
Chapter 2-Strategic Use of Distribution Information Systems
Chapter 3-Information System Tactical Planning
Chapter 4-Selecting the System
Chapter 5-ERP Implementation
Chapter 6-The ERP Components
Chapter 7-Automating Sales and Marketing
Chapter 8-Replenishment
Chapter 9-Operations Management
Chapter 10-Executive Information Systems
Chapter 11-Managing the System
Chapter 12-Standardization and Putting the System to Work
Chapter 13-Customer Relationship Management
Chapter 14-Logistics and Procurement Systems
Chapter 15-Building a Best in Class ERP
ERP software has been growing at high speed in past years. Now, let's take a look at the top five consequential trends in ERP software for 2015. To get more details, Visit: http://www.controlerp.com
I, BIPIN BHARDWAJ, Hereby declare that this MUP report is the record of authentic work carried out and has not been submitted to any other University or Institute for the award of any degree / diploma etc.
Discover 6 Must-Have Features of Automotive ERP SolutionSudeshnaJain
ERP software comes with a plethora of features and add-ons that vary by vendor.
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The topic of ERP can sometimes seem complicated and overwhelming, but the ERP experts at MAX are here to help. This eBook covers all the bases, helping manufacturing professionals understand the ins-and-outs of ERP and how they apply to your business. Read on to learn the basics of ERP, what type of companies benefit most and how, the fundamentals of implementation, how to select the right software, and more.
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Introduction to Enterprise Resource Planning (ERP )
Information System and Its Components, Value Chain Framework, Organizational Functional Units, Evolution of ERP Systems, Role of ERP in Organization, Three-Tier Architecture of ERP system
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Our ERP solutions simplify key business operations whilst improving operational efficiency. Our web based ERP solution in India consists of several key modules such as finance/accounting, sales/marketing, purchase, inventory and much more making it a perfect pick for businesses involved in diverse industry verticals in whole India. For more details please visit our website www.brinnam.com
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2. What is ERP?
Definition:
ENTERPRISE RESOURCE PLANNING(ERP) is a cross-
functional enterprise system driven by an integrated suite
of software modules that supports the basic internal
business processes of a company
2
3. The practice of consolidating an enterprise’s
planning, manufacturing, sales and marketing efforts
into one management system.
Combines all databases across departments into a
single database that can be accessed by all
employees.
ERP automates the tasks involved in performing a
business process.
3 What is ERP?
4. Before ERP example4
Vendor
Sales dept.
Demographic Files
Warehouse
Inventory Files
Purchasing dept.
Purchasing Files
Accounting dept.
Accounting Files
Order parts
Checkforparts
Callback“notinstock”
Weorderedparts
“weneedparts”
“weorderedparts”
Place order
Sends report
Ship parts.
Sends report
Callback“notinstock”
Weorderedparts
Ship parts.
Ship parts.
5. Typical Business Process :
Key observation
5
A typical enterprise has many Departments/ Business
units(BU).
These Departments/ BU continuously communicate and
exchange data with each other.
The success of any organization lie’s in effective
communication and data exchange within the
Departments/ BU as well as associated third party such
as Vendors, Outsourcers and Costumers.
Also known as Decentralized System.
6. Problems with Decentralized
System
6
Numerous disparate information system are developed
individually over the time.
Integrating the data becomes time and money consuming.
Inconsistences and duplication of data.
High inventory, material and human resource cost.
7. 7
Vendor
Order parts
Sales Dept. Accounting
Purchasing Dept.
Warehouse
Database
Inventory data
Purchasing data
Ship parts
BooksInventory
Order is placed
Invoice Accounting
Financial data
exchenge
Centralized System :
ERP example
8. Centralized System :
Key observation
8
Data is maintained at a central location and is shared
with various Departments.
Departments have access information/ data of the other
Departments/ BU/
9. Benefits of Centralized
System
9
Eliminates the duplication, discontinuity and redundancy in
data.
Provides information across departments in real time.
Provides control over various business processes.
Increase Productivity, better inventory management,
promotes quality, reduced material cost, boosts profits.
Better Customers interaction, increased throughput,
improves customer services.
11. ERP Components
Financial Management
At the core of ERP are the financial modules,
including general ledger, accounts receivable,
accounts payable, billing and fixed asset
management. If your organization is considering the
move to an ERP system to support expansion into
global markets, make sure that multiple currencies
and languages are supported, as well as regulatory
compliance in the U.S. and in foreign countries.
Other functionality in the financial management
modules will include budgets, cash-flow, expense
and tax reporting. The evaluation team should focus
on areas that are most important to support the
strategic plans for your organization.
11
12. ERP Components12
Business Intelligence
Business Intelligence (BI) has become a standard
component of most ERP packages. In general, BI tools
allow users to share and analyse the data collected
across the enterprise and centralized in the ERP
database. BI can come in the form of dashboards,
automated reporting and analysis tools used to monitor
the organizational business performance. BI supports
informed decision making by everyone, from
executives to line managers and accountants.
13. ERP Components13
Supply Chain Management
Supply Chain Management (SCM), sometimes referred
to as logistics, improves the flow of materials through an
organization by managing planning, scheduling,
procurement, and fulfillment, to maximize customer
satisfaction and profitability. Sub modules in SCM often
include production scheduling, demand management,
distribution management, inventory management,
warehouse management, procurement and order
management..
14. ERP Components14
Human Resource Management
Human resource management ERP modules should
enhance the employee experience – from initial
recruitment to time tracking. Â Sub modules can
include payroll, performance management, time
tracking, benefits, compensation and workforce
planning. Self-service tools that allow managers and
employees to enter time and attendance, choose
benefits and manage PTO are available in many ERP
solutions.
15. ERP Components15
Manufacturing Operations
Manufacturing modules make manufacturing operations
more efficient through product configuration, job costing
and bill of materials management. ERP manufacturing
modules often include Capacity Requirements Planning,
Materials Requirements Planning, forecasting, Master
Production Scheduling, work-order management and shop-
floor control
Integration
Key to the value of an ERP package is the integration
between modules, so that all of the core business functions
are connected. Information should flow across the
organization so that BI reports on organization-wide results.
16. 16 ERP Evolution
From manufacturing co-ordination to
enterprise wide backend solutions.
17. ERP Evolution17
Inventory Management & Control-1960’s
Inventory Management and control is the combination of
information technology and business processes of
maintaining the appropriate level of stock in a warehouse.
The activities of inventory management include identifying
inventory requirements, setting targets, providing
replenishment techniques and options, monitoring item
usages, reconciling the inventory balances, and reporting
inventory status.
18. ERP Evolution18
Material Requirement Planning (MRP)-1970’s
Materials Requirement Planning (MRP) utilizes software
applications for scheduling production processes. MRP
generates schedules for the operations and raw material
purchases based on the production requirements of
finished goods, the structure of the production system, the
current inventories levels and the lot sizing procedure for
each operation
Manufacturing Requirements Planning (MRP
II)-1980’s Manufacturing Requirements Planning or MRP
utilizes software applications for coordinating
manufacturing processes, from product planning, parts
purchasing, inventory control to product distribution.
19. ERP Evolution19
Enterprise Resource Planning (ERP)-1990’s
Enterprise Resource Planning or ERP uses multi-module
application software for improving the performance of the
internal business processes. ERP systems often integrates
business activities across functional departments, from
product planning, parts purchasing, inventory control,
product distribution, fulfillment, to order tracking. ERP
software systems may include application modules for
supporting marketing, finance, accounting and human
resources.
22. High Level Summary Costs of 3
Different On-Premise Scenarios
(1) 3 CONCURRENT USERS – FINANCIAL MODULES ONLY
This scenario is about $20,000-$30,000 (software & implementation
services. Hardware is extra).
(2) 7-10 CONCURRENT USERS – FINANCIALS, SALES & INVENTORY
FUNCTIONALITY
This scenario is about $60,000-$90,000 (software & implementation
services. Hardware is extra).
(3) 12-15 CONCURRENT USERS – FINANCIALS, SALES, INVENTORY
FUNCTIONALITY
This scenario is about $120,000-$180,000 (software & implementation
services. Hardware is extra).
22
23. ERP Project and Time
Real transformational ERP efforts will usually run between 1 to 3
years, on average.
Short implementations (3 to 6 months):
small companies,
implementation limited to a small area of the company, or
the company only used the financial pieces of the ERP system.
The important thing is not to focus on how long it will take but to
understand why you need ERP and how you will use it to improve
your business.
23
24. Hidden 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
24
25. Benefits of ERP Systems
Improving integration, flexibility
Fewer errors
Improved speed and efficiency
More complete access to information
Lower total costs in the complete supply chain
Shorten throughput times
Sustained involvement and commitment of the top management
25
26. 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
26 Benefits of ERP Systems
27. 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.
This is an IT-Related Project.
27
28. ERP Implementation
Phases
4 Major Phases:
Concept/initiation
Development
Implementation
Closeout/Operation and maintenance
28
29. Risks with ERP
Implementation
Expensive (can costs 100 thousands to millions of dollars)
Time-consuming (can take months to years)
Great risk for the organization
Transfer of Knowledge
Acceptance with the company
29
30. 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
30
31. 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.
31
32. Best Practices of ERP
Implementation
Change Management
Extensive Education and Training
Data Clean up and Data Integrity
Implementation is viewed as an
ongoing process
32
33. Best Practices of ERP
Implementation
Change Management
Changes in business procedures,
responsibilities,
work load.1
As a result, ERP implementations are times of
high stress, long hours, and uncertainty.1
Mid-level managers must2
facilitate continual feedback from employees,
provide honest answers to their questions, and
help resolve their problems.
33
Sources:
1. Yakovlev, I.V., “An ERP Implementation and Business Process Reengineering at a Small University”,
Educause Quarterly, Number 2, 2002;
2. Umble, M. Michael, “Avoiding ERP Implementation Failure”, Industrial Management, Jan/Feb 2002.
34. Best Practices of ERP
Implementation
Extensive Education and Training
General education about the ERP system
for everyone.
Massive amount of end users training
before and during implementation.
Follow-up training after the
implementation.
10 to 15% of total ERP implementation
budget for training will give an
organization an 80% chance of a
successful implementation.
34
Source: Umble, M. Michael, “Avoiding ERP Implementation Failure”, Industrial Management, Jan/Feb 2002.
35. Best Practices of ERP
Implementation
Data Clean up and Data Integrity
Clean-up data before cut-over.1
“Near enough is no longer good enough.”2
To command trust, the data in the system must be
sufficiently available and accurate.3
Eliminate the old systems, including all informal systems.3
35
Sources:
1. http://www.bpic.co.uk/checklst.htm, viewed November 5, 2002;
2. http://www.projectperfect.com.au/info_erp_imp.htm, viewed November 5, 2002;
3. M. Michael Umble, “Avoiding ERP Implementation Failure”, Industrial Management, Jan/Feb 2002.
36. Best Practices of ERP
Implementation
Implementation is viewed as an ongoing process
Ongoing need for training and software support after
implementation.
Ongoing need to keep in contact with all system users
and monitor the use of the new system.
Ongoing process of learning and adaptation that
continually evolves over time.
36
Source: Umble, M. Michael, “Avoiding ERP Implementation Failure”, Industrial Management, Jan/Feb 2002.
Thanks for Kevin. I am going to introduce how an company implement its ERP Project and what lessons we can learn. Well, please put up your hand if you know about Nestle?