Enterprise Resource Planning

1. ENTERPRISE
RESOURCE PLANNING
Kanishk Agarwal: i001
S Aishwarya: i002
Jelam Bhatt: i004
Anirudh Chaudhary: i006

2. What is ERP?
 Enterprise resource planning (ERP) is business management
software that allows an organization to use a system of integrated
applications to manage the business.
 Being Specific ERP systems are large computer systems that
integrate application programs in accounting (i.e., accounts
receivable), sales (i.e., order booking), manufacturing (i.e.,
product shipping) and the other functions in the firm.This
integration is accomplished

3. What is ERP?
Contd..
 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

5. History of ERP

6.  1960’s - Systems Just for InventoryControl
 1970’s - MRP – Material RequirementPlanning (Inventory with
materialplanning & procurement)
 1980’s - MRP II – Manufacturing ResourcesPlanning (Extended
MRP to shop floor &distribution Management.)
 Mid 1990’s - ERP – Enterprise ResourcePlanning (Covering all the
activities ofan Enterprise)
 2000 onwards – ERP II – CollaborativeCommerce

7. 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

9. Vendors of
ERP

10.  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, SaabAutomobile,
BellSouth Cellular Corporation, Holiday Inns, Fox
 Pegasus ERP- a multi-facility, multi-currency business
management solution that helps small and mid-sized businesses
manage their supply chain to create experiences that delight their
customers.

11. Building ERP
 Software vendor selection
 Detailed study by the vendor
 Scope & platform finalization
 Freezing the commercials
 Development
 Hardware addition/upgradation
 Old master/transaction data migration
 Parallel run with Integration & connectivity check
 Implementation
 Maintenance

12. ERP
Implementatio
n Practices
Project Management
 Organizations link implementation teams to both the technical
(IS) and functional departments.
 They tightly control implementation processes
 They appropriately use consultants throughout the
implementation process
 They manage turnover of key implementation employees

13. ERP
Implementatio
n Practices
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

14. Case-Study on
Success of ERP
Why ERP?
 Having 114 subsidiaries, more than 82,000 employees across 40
countries - tried to harmonize its HR functions, the challenges
were of a similarly giant scale.
 High maintenance costs, local controls lacking transparency,
inefficient decision making, under-utilization of resources, manual
processes, etc. made it difficult for LG to operate as a global
company, which then decided to take the ERP route.

15. The challenges for LG:
 Location specific multiple systems leading to unclear top-level
reporting, lack of optimum resource utilization
 Location specific processes lacking transparency and automation
needs for a global reporting
 Disengaged employees, limited outlook, no room for information
or best practices sharing
 Limited localized resources for employee learning & training
 Challenges with decision making, with significant business impact

16. Selection criteria for ERP solutions:
 LG’s familiarity with Oracle technology due to earlier Oracle usage
made it easier to finalize a solution.
 It offered large data hosting, seamless migration of old data, easy
scalability, multiple modules addition as needed and centralized
access and control.
 LG hired Oracle Consulting to build a single centralized system
which integrates availableOracle HR modules for uniform use at
global level, thereby replacing location specific system
dependency.

17. Achieved benefits:
 Centrally managed a single system with minimal maintenance costs
 Transparency in the recruitment and employee appraisal processes
which enabled hiring, engaging and rewarding performance based on
the right competencies and proven performance
 Real time reporting for higher management and tracking of set goals
and objectives
 Informed decision making due to readily available real time reports
 Centralized control over HR processes, with region level flexibility to
implement localized changes
 Cost savings due to not having to maintain multiple systems
 Easy learning facilitated for common tasks through document sharing
and online tutorials, resulting in time and cost savings

18. Limitations of
ERP

19. Limitations of
ERP
contd..
 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