Erp presentation

Presentation by;Presentation by;
Mr. Abhijeet ShettyMr. Abhijeet Shetty
Ms. Ragini MohiteMs. Ragini Mohite
Mr. Aashay KhawteMr. Aashay Khawte
Mr. Sagar ShirwaikarMr. Sagar Shirwaikar
Mr. Vinayak DhumatkarMr. Vinayak Dhumatkar
Date: 05Date: 05THTH
AUGUST 2009AUGUST 2009

5 August 20095 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)ICAI - GMCS (LLIM - Jul/Aug 09) 22
ContentsContents
• Introduction to ERPIntroduction to ERP
• Business Process Re-engineering (BPR)Business Process Re-engineering (BPR)
• ERP ImplementationERP Implementation
• Vendors of ERPVendors of ERP
• Business Modules in ERPBusiness Modules in ERP
• ERP & Role of Chartered AccountantsERP & Role of Chartered Accountants
• ConclusionConclusion

Why ERP ?Why ERP ?
To Survive ,Thrive And Beat The CompetitionTo Survive ,Thrive And Beat The Competition
Manage futureManage future
Manage InformationManage Information
Automation of the process of Data CollectionAutomation of the process of Data Collection
Information Technology (ERP Solution)Information Technology (ERP Solution)

History Of ERPHistory Of ERP
• ERP (Enterprise ResourceERP (Enterprise Resource
Planning) is the evolution ofPlanning) is the evolution of
Manufacturing RequirementsManufacturing Requirements
Planning (MRP) II.Planning (MRP) II.
• From business perspective, ERPFrom business perspective, ERP
has expanded from coordination ofhas expanded from coordination of
manufacturing processes to themanufacturing processes to the
integration of enterprise-wideintegration of enterprise-wide
backend processes.backend processes.
• From technological aspect, ERPFrom technological aspect, ERP
has evolved from legacyhas evolved from legacy
implementation to more flexibleimplementation to more flexible
tiered client-server architecture.tiered client-server architecture.

Timeline System Description
1960s Inventory
Management
& Control
It includes identifying inventory requirements,
setting targets, providing replenishment techniques
and options, monitoring item usages, reconciling
the inventory balances, and reporting inventory
status.
1970s Material
Requirement
Planning
(MRP)
MRP utilizes software applications for scheduling
production processes. MRP generates schedules for
the operations and raw material purchases.
1980s Manufacturing
Requirements
Planning (MRP
II)
Manufacturing Requirements Planning or MRP
utilizes software applications for coordinating
manufacturing processes, from product planning,
parts purchasing, inventory control to product
distribution.
1990s Enterprise
Resource
Planning (ERP)
ERP was introduced by Research & Analysis by
Gartner in 1990. ERP systems integrate 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.

What is ERP ?What is ERP ?
• ENTERPRISEENTERPRISE::
An enterprise is a group of people with a common goal, which hasAn enterprise is a group of people with a common goal, which has
certain resources at its disposal to achieve that goal.certain resources at its disposal to achieve that goal.
• RESOURCERESOURCE::
Resources included are money, man-power, materials, and all otherResources included are money, man-power, materials, and all other
things that are required to run the enterprise.things that are required to run the enterprise.
• PLANNINGPLANNING::
Planning is done to ensure that nothing goes wrong. Planning isPlanning is done to ensure that nothing goes wrong. Planning is
putting necessary functions in place and more importantly, puttingputting necessary functions in place and more importantly, putting
them together.them together.
• ERP covers the techniques and concepts employed for theERP covers the techniques and concepts employed for the
integrated management of business as a whole, from the viewpointintegrated management of business as a whole, from the viewpoint
of the effective use of management resources, to improve theof the effective use of management resources, to improve the
efficiency of an enterprise.efficiency of an enterprise.

Features of ERPFeatures of ERP
• Integrates Business Operations.Integrates Business Operations.
• Library of Business Process.Library of Business Process.
• Real Time updating of transactions.Real Time updating of transactions.
• Multi-Tasking & Multi-Currency Features.Multi-Tasking & Multi-Currency Features.
• Easy Web Enablement Features.Easy Web Enablement Features.
• Supports - Alert facilities, data warehouse & OLAP.Supports - Alert facilities, data warehouse & OLAP.

Industry wise Uses of ERP…..Industry wise Uses of ERP…..
• ManufacturingManufacturing
• SoftwareSoftware
• InsuranceInsurance
• HealthcareHealthcare
• HospitalityHospitality

ERP: AdvantagesERP: Advantages
• Reduction of lead-time.Reduction of lead-time.
• Reduction in cycle time.Reduction in cycle time.
• Better customer satisfaction.Better customer satisfaction.
• Improved supplier performance.Improved supplier performance.
• Increased flexibility.Increased flexibility.
• Reduction in quality costs.Reduction in quality costs.
• Improved resource utility.Improved resource utility.
• Improved information accuracyImproved information accuracy

ERP: DisadvantagesERP: Disadvantages
• Lack of clarity of expectations from ERP.Lack of clarity of expectations from ERP.
• Unreasonable scope & Inadequate Resources.Unreasonable scope & Inadequate Resources.
• Choice of wrong ERP product – not all products are suitable for allChoice of wrong ERP product – not all products are suitable for all
industries.industries.
• Not choosing the right people for implementation.Not choosing the right people for implementation.
• Lack of participation of end-users.Lack of participation of end-users.
• Lack of proper communication within the organization.Lack of proper communication within the organization.

Introduction to BPRIntroduction to BPR
• Business process reengineering (BPR)Business process reengineering (BPR)
is, in computer science and management, anis, in computer science and management, an
approach aiming at improvements by meansapproach aiming at improvements by means
of elevating efficiency and effectiveness of theof elevating efficiency and effectiveness of the
business process that exist within and acrossbusiness process that exist within and across
organizations. The key to BPR is fororganizations. The key to BPR is for
organizations to look at their businessorganizations to look at their business
processes from a "clean slate" perspectiveprocesses from a "clean slate" perspective
and determine how they can best constructand determine how they can best construct
these processes to improve how they conductthese processes to improve how they conduct
business.business.

Definitions of BPRDefinitions of BPR
Thomas H. Davenport (1993)Thomas H. Davenport (1993)
• "encompasses the envisioning of new"encompasses the envisioning of new
work strategies, the actual process designwork strategies, the actual process design
activity, and the implementation of theactivity, and the implementation of the
change in all its complex technological,change in all its complex technological,
human, and organizational dimensions."human, and organizational dimensions."
Hammer and Champy (1993)Hammer and Champy (1993)
• "... the fundamental rethinking and radical"... the fundamental rethinking and radical
redesign of business processes to achieveredesign of business processes to achieve
dramatic improvements in criticaldramatic improvements in critical
contemporary measures of performance,contemporary measures of performance,
such as cost, quality, service, and speed."such as cost, quality, service, and speed."

Benefits of BPRBenefits of BPR
• Business process is streamlinedBusiness process is streamlined
• Business process is optimized and more efficientBusiness process is optimized and more efficient
• Strict controls can be enforced and monitored.Strict controls can be enforced and monitored.
• Best practices can be adhered to.Best practices can be adhered to.
• Time and cost saving as a result of eliminated redundant tasks.Time and cost saving as a result of eliminated redundant tasks.

Principles of BPRPrinciples of BPR
• Focus on the Right ProcessesFocus on the Right Processes
• Voice of the CustomerVoice of the Customer
• Managing ChangeManaging Change
• Active ParticipationActive Participation
• Targets and Performance MeasureTargets and Performance Measure
• IntegrationIntegration
• FlexibilityFlexibility

Conclusion of BPRConclusion of BPR
““The onus of the successful implementation lies withThe onus of the successful implementation lies with
the Organization”the Organization”
To be successful, business process reengineering projects need toTo be successful, business process reengineering projects need to
be top down, taking in the complete organization, and the full end tobe top down, taking in the complete organization, and the full end to
end processes. It needs to be supported by tools that makeend processes. It needs to be supported by tools that make
processes easy to track and analyze.processes easy to track and analyze.

ERP Implementation AndERP Implementation And
MethodologyMethodology
• ERP implementation is a special eventERP implementation is a special event
• Consultants and Users Should Work TogetherConsultants and Users Should Work Together
• Improve The Flow of InformationImprove The Flow of Information
• CustomizationCustomization

Steps in ERP ImplementationSteps in ERP Implementation
• Identifying the needs for implementing an ERP packageIdentifying the needs for implementing an ERP package
• Evaluating the ‘As is’ situation of the businessEvaluating the ‘As is’ situation of the business
• Deciding the ‘would be’ situation of the businessDeciding the ‘would be’ situation of the business
• Reengineering the business process to achieve the desiredReengineering the business process to achieve the desired
results in the existing processesresults in the existing processes
• Evaluating the various available ERP packagesEvaluating the various available ERP packages
• Finalizing the most suitable ERP packagesFinalizing the most suitable ERP packages
• Installing the required hardware & networks for selected ERPInstalling the required hardware & networks for selected ERP
• Finalizing the implementation consultants who will assist inFinalizing the implementation consultants who will assist in
implementationimplementation
• Implementing the ERP packagesImplementing the ERP packages

Vendors of ERP Package
• Oracle corporation
– Oracle is one of the top players in the ERP market
– Oracle Manufacturing Applications offers internet enabled,
network centric computing
– As a one stop shop, it offers the database, tools,
implementation, applications and UNIX operating systems
running on a wide choice of hardware
• SAP AG
– SAP is the world's second largest business software company.
– SAP focuses on six industry sectors: process industries, discrete
industries, consumer industries, service industries, financial
services, and public services
– SAP matches business processes to modules.

Vendors of ERP Package (Contd.)
•Baan
– It addresses manufacturers from largest global players to smallest ERP
user.
– It offers tools for Business Process Analysis
– It uses 4GL language
•SSA
– BPCS was developed by System Software Associates (SSA)
– It is used in manufacturing companies
– It offers functionality of Process and Kanban Manufacturing

Vendors of ERP Package (Contd.)
•Sage Group plc
– It is engaged in the development, distribution and support of
business Management software
– Accpac is a vendor of accounting, Customer relationship
management and business management software
– It has two main product lines
• Sage Accpac ERP
• Sage Pro ERP

Major Modules in ERPMajor Modules in ERP
PackagesPackages
• Finance ModuleFinance Module
• HR ModuleHR Module
• ManufacturingManufacturing
ModuleModule
• Material ManagementMaterial Management
(MM) Module(MM) Module
• Sales & DistributionSales & Distribution
ModuleModule
SALES &
DISTRIBUTION
MANAGEMENT
LOGISTICS
&
CUSTOMER SERVICE
MANAGEMENT

Finance ModuleFinance Module
• Finance functionality for organizations whose business isFinance functionality for organizations whose business is
spread over the world.spread over the world.
• Company wide control & Integration of FinancialCompany wide control & Integration of Financial
Information.Information.
• Sub Systems are :Sub Systems are :
– Financial AccountingFinancial Accounting
– TreasuryTreasury
– ControlControl
– Enterprise ManagementEnterprise Management

Human Resource ModuleHuman Resource Module
• HR is an essential factor of any successful business. This ModuleHR is an essential factor of any successful business. This Module
offer company wide solutions for HR departments and make itoffer company wide solutions for HR departments and make it
possible for authorized users of the other departments to accesspossible for authorized users of the other departments to access
specific employee data.specific employee data.
– Personnel AdministrationPersonnel Administration
– Employee Master DataEmployee Master Data
– Recruitment ManagementRecruitment Management
– Open PositionsOpen Positions
– Selection & HiringSelection & Hiring
– Travel ManagementTravel Management
– Personnel cost planningPersonnel cost planning

Manufacturing ModuleManufacturing Module
• Components of Manufacturing Module :Components of Manufacturing Module :
– Material & Capacity PlanningMaterial & Capacity Planning
– Quality ManagementQuality Management
– Cost ManagementCost Management
– Shop Floor ControlShop Floor Control

Material Management ModuleMaterial Management Module
• It supports all phases of Material - Management, planning, control,It supports all phases of Material - Management, planning, control,
purchasing, receiving, inventory management & bill payment. Itspurchasing, receiving, inventory management & bill payment. Its
sub-modules are :sub-modules are :
– Pre Purchasing ActivitiesPre Purchasing Activities
– PurchasingPurchasing
– Vendor EvaluationVendor Evaluation
– Inventory ManagementInventory Management
– Invoice VerificationInvoice Verification

Sales & Distribution ModuleSales & Distribution Module
Offers access to real-time, online information from sales to billing.Offers access to real-time, online information from sales to billing.
Sub-systems in this modules are –Sub-systems in this modules are –
• Masters Data ManagementMasters Data Management
• Order ManagementOrder Management
• Warehouse ManagementWarehouse Management
• DispatchDispatch
• InvoicingInvoicing
• PricingPricing
• Sales SupportSales Support

Role of Chartered AccountantsRole of Chartered Accountants
in ERPin ERP
• How does ERP matter Chartered Accountants?How does ERP matter Chartered Accountants?
• Rapidly changing & challenging business world and automation ofRapidly changing & challenging business world and automation of
processesprocesses
• ERP helps the organization to realize its vision and objectives in anERP helps the organization to realize its vision and objectives in an
optimized way.optimized way.
• Role as consultants, auditors, advisors or managers in controlling,Role as consultants, auditors, advisors or managers in controlling,
managing and supporting the business.managing and supporting the business.

Major Challenges in ERP AuditsMajor Challenges in ERP Audits
• Complexity of ERPComplexity of ERP
• ManpowerManpower
• Inadequate Attention towardsInadequate Attention towards
security of Systemssecurity of Systems

ConclusionConclusion
““A Chartered Accountant withoutA Chartered Accountant without
the knowledge of ERP may feel asthe knowledge of ERP may feel as
if he is a fish out of the bowl”if he is a fish out of the bowl”

BibliographyBibliography
• www.erpwire.comwww.erpwire.com
• www.en.wikipedia.orgwww.en.wikipedia.org
• www.icai.orgwww.icai.org
• www.teamtechnology.co.ukwww.teamtechnology.co.uk
• ICAI – Reference Books & Study Material.ICAI – Reference Books & Study Material.

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