An ERP system organizes and standardizes key business processes through a unified database and integrated software applications. It models the entire business, including information flow, procedures, and relationships between functions. ERP systems evolved from inventory control in the 1960s to encompass more business activities over time. Companies adopt ERP to integrate information, standardize operations, reduce costs, and update processes automatically across modules. While costly to implement, ERP aims to reflect how a business operates through its value chains. Recent trends include web-based and wireless ERP, as well as linking ERP to other systems like supply chain management and CRM.

1. ENTERPRISE
RESOURCE
PLANNING
By: Robemar J. Fortaleza

2. ERP system
then, would be a set of software applications that organize,
define and standardize the business processes necessary to
effectively plan and control an organization. Essentially, ERP
applications are a computer model of your business, embodying
the products and processes, information flow, procedures, and
relationships between functions and activities. A set of planning
applications can provide recommendations for what must be
accomplished in order to meet the forecasted demand and keep
the business functioning smoothly.

3. A typical ERP system will use multiple components of
computer hardware and software to achieve the integration.
A key ingredient of most ERP systems is the use of a unified
database to store data for various system modules.
 Broken down into business processes
 HRM
 Distribution
 Financials
 Manufacturing

4. 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 of an Enterprise)
2000 onwards – ERP II – Collaborative Commerce (Extending ERP
to external business entities)

5. 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.
 ERP systems reflect a specific way of doing business.
 Must look at your value chains, rather than functions.

6. 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.
 Resistance to change.

7. Vendors of ERP Example
 SAP - Systems Applications Products in Data Processing
29% market share - Honda, IBM, Bank of Canada, P & G
 BAAN - Dutch - 5% - Russell Stover Candy, Mercedez Benz, Boeing, Nortel
 Peoplesoft - California - 6% - NBA, Adidas, Anderson Consulting, Hilton
Hotels, NYNEX
 Oracle - California - 10% - USPS, CBS, Nike, Kodak, Toronto Dominion
Bank
 J.D. Edwards - Colorado - 7% - Harley Davidson, Saab Automobile,
BellSouth Cellular Corporation, Holiday Inns, Fox Television Stations

8. Technology Excellence
 Organizations rely heavily on the ERP package as the majority of their
application configuration.
 Organizations implement ERP packages on time and within budget
 Organizations centralize support groups within their IT departments

9. ERP Implementation Practice
Change Management
 Redesigned jobs call for higher levels of skills and
accountability
 Change management is viewed as more than just increased
training and communication
 Enterprise-wide systems drive redesigned changes.
 The executive sponsor is the change agent.
 Resistance from the work force (including management) is
the most significant obstacle.

10. New Developments In ERP
 Availability of web-based and wireless ERP systems
 Adoption of easy-to-install ERP systems
 Linkage to other software systems, e.g., supply chain management system, e-commerce,
customer relationship management system