This document provides an overview of enterprise resource planning (ERP) systems. It defines ERP as business software that integrates various business functions and processes. The main components of ERP systems are described as financial management, business intelligence, supply chain management, human resource management, and manufacturing operations. Implementation approaches, benefits, challenges, and costs of ERP systems are also summarized.

1. INFORMATIONTECHNOLOGYFOR MANAGERS
PRESENTATIONON
ENTERPRISESRESOURCEPLANNING

2. WHAT IS ERP ?
ENTERPRISE RESOURCE PLANNING(ERP) IS
BUSINESS PROCESS MANAGEMENT SOFTWARE THAT
ALLOWS AN ORGANIZATION TO USE A SYSTEM
OF INTEGRATED APPLICATIONS TO MANAGE THE
BUSINESS AND AUTOMATE MANY BACK
OFFICE FUNCTIONS RELATED TO TECHNOLOGY, SERVICES
AND HUMAN RESOURCES.

3. ERP Components
• Financial Management
• Business Intelligence
• Supply Chain Management
• Human Resource Management
• Manufacturing Operations

4. FINANCIAL MANAGEMENT
• At the core of ERP are the financial modules, including general ledger, accounts
receivable, accounts payable, billing and fixed asset management.
• Other functionality in the financial management modules will include budgets,
cash-flow, expense and tax reporting.

5. Business Intelligence
• BI tools allow users to share and analyse the data collected across the enterprise
• BI can come in the form of dashboards, automated reporting and analysis tools
used to monitor the organizational business performance.

6. Supply Chain Management
• SCM often include
production scheduling,
demand management,
distribution management,
inventory management,
warehouse management,
procurement and order management.

7. Human Resource Management
• Human resource management ERP modules should enhance the employee
experience – from initial recruitment to time tracking.
• Sub modules can include
payroll,
performance management,
time tracking,
benefits,
compensation and workforce planning

8. Manufacturing Operations
• ERP manufacturing modules often include
Capacity Requirements Planning,
Materials Requirements Planning,
forecasting,
Master Production Scheduling,
work-order management and
shop-floor control

9. Evolution OF ERP

10. 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.

11. 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.

12. 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.

13. 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, fulfilment, to order tracking. ERP software systems
may include application modules for supporting marketing, finance,
accounting and human resources.

14. Major Reasons for Adopting ERP
• Integrate financial information.
• Integrate customer order information.
• Standardize and speed up operations processes.
• Reduce inventory .
• Standardize Human Resources information .

15. Potential Benefits of ERP
• Internal Benefits
– Integration of a single source of data
– Common data definition
– A real-time system
– Increased productivity
– Reduced operating costs
– Improved internal communication
– Foundation for future improvement

16. Potential Benefits of ERP
• External Benefits
– Improved customer service and order fulfillment
– Improved communication with suppliers and customers
– Enhanced competitive position
– Increased sales and profits

17. ERP Implementation Approaches
• The big bang – install a single ERP system across the entire
organization
• Franchising – Independent ERP systems are installed in different units
linked by common processes, e.g., bookkeeping.
• Slam dunk – install one or several ERP modules for phased
implementation of key business processes.

18. Major Phases of ERP Implementation.
• Initiation – develop business case, project scope, and implementation
strategy
• Planning – establish implementation team, determine goals and
objectives, establish metrics
• Analysis and process design – analyze and improve existing processes,
map new processes to be adopted by the system

19. Major Phases of ERP Implementation.
• Realization – install a base system , customization, and test the
system.
• Transition – replace the formal system with the new system, data
conversion.
• Operation – monitor and improve system performance, provide
continued training and technical support.

20. Major Challenges to ERP Implementation
• Limitations of ERP technical capabilities
• Inconsistency with existing business processes
• Costs - implementation (hardware, software, training, consulting) and
maintenance
• Impact on organizational structure (front office vs. back office, product lines,
etc.)
• Changes in employee responsibilities

21. Major Challenges to ERP Implementation
• Flexibility of software system upgrades
• Implementation timelines
• Availability of internal technical knowledge and resources
• Education and training
• Implementation strategy and execution
• Resistance to change

22. Costs IN ERP

23. Other hidden cost
 Training
 Integration and testing
 Data conversion
 Data analysis
 Consultants

24. 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.

25. Some of the Main ERP vendors

26. THANK YOU