Chap 1 Introduction to ERP
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Transcript of Chap 1 Introduction to ERP
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 1/18
Enterprise Resource Planning
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 2/18
Introduction to ERP
An integrated information system that servesall departments within an enterprise.
Evolving out of the manufacturing industry,
ERP implies the use of packaged softwarerather than proprietary software written by orfor one customer.
ERP modules may be able to interface with anorganization's own software with varyingdegrees of effort, and, depending on thesoftware, ERP modules may be alterable viathe vendor's proprietary tools as well asproprietary or standard programming
languages.
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 3/18
Evolution of ERP
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 4/18
Why ERP?
To Enhance Profitability
for Healthy Operations:
Integration of Systems across the Functional
Departments in a Company as well as acrossthe Enterprise as a Whole.
Better Customer Service.
Introduction of Latest Technologies as and
when the are ready for the Industryacceptance
Expertise database
Avoids data redundancy
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 5/18
Why ERP?
Competition in the Market:
Manufacturing Challenges.
Manufacturing Globally.
Distribution network spread. New Product introduction.
Lower manufacturing lead time.
Focus on industry markets.
Satisfying the needs of customers.
Develop specific business methods andprocesses.
Integration with third party products.
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 6/18
Why ERP?
Demands on the Industry:
Better products at lower costs
Tough competition
Need to analyze costs / revenues on a product orcustomer basis
Flexibility to respond to changing businessrequirements
More informed management decision making
Solving the Problems:
Unable to get acurate, timely information
Applications not complete for existing businesspractices
Modifications are time consuming or not feasible
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 7/18
Advantages of ERP
Business Integration: automatic dataexchange among applications
Flexibility: Different languages, currencies,
accounting standards and so on Better Analysis and planning Capabilities
Use of Latest Technology
The indirect benefits include better corporate
image, improved customer goodwill, customersatisfaction, and so on.
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 8/18
What is that ERP enables?
Systematic Look into your Systems &procedures
Optimizing the processes
Enables you to adapt yourself to newtechnologies
Discipline across the functions
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 9/18
Problems Taken Care of bythe ERP:
Availability check at the time of AcceptingSales order
On-line Material Status & Shortages
Productivity Enhancements Material Planning
Customer Service
Cash Management
Inventory Quality
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 10/18
What drives ERP?
Business drives
Customer Satisfaction
Business Development - new areas, products,
services Ability to face competition
Efficient processes required to push thecompany to top gear
IT drives
Present Software does not meet businessneeds
Legacy systems difficult to maintain
Obsolete hardware/software difficult to
maintain
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 11/18
ERP in India
Until recently Indian organizations were in asellers market and operating in a regulatedenvironment.
With globalization and gradual lifting of regulation, there is a paradigm shift in runningthe business.
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 12/18
Evaluation Criteria
Some important points to be kept in mind whileevaluating ERP software include
Functional fit with the Companys business
processes. Degree of integration between the various
components of the ERP system
Flexibility and scalability
User friendliness Ease of implementation
Ability to support multi-site planning andcontrol
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 13/18
Evaluation Criteria
Technology - client/server capabilities,database independence, security
Availability of regular upgrades
Amount of customization required Local support infrastructure
Reputation and sustainability of the ERPvendor
Total costs, including cost of license, training,implementation, maintenance, customizationand hardware requirements.
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 14/18
Pre-ERP Scenario
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 15/18
Post ERP Scenario
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 16/18
ERP Modules
Finance
Plant Maintenance
Quality Management Material Management, etc
Inventory Management
Manufacturing and productionplanning
Sales and distribution
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 17/18
FINANCE MODULE
The finance modules of most ERP systems will have thefollowing subsystems:
1. Financial Accounting:
General Ledger
Accounts Receivable/payable
Special Ledgers, Fixed Asset Accounting
Legal Consolidation.
Investment Management:
Investment Planning Budgeting
Controlling
Depreciation Forecast
Simulation
Calculation.
8/9/2019 Chap 1 Introduction to ERP
http://slidepdf.com/reader/full/chap-1-introduction-to-erp 18/18
FINANCE MODULE
Controlling
Overhead Cost Controlling.
Activity- Based Costing
Product Cost Accounting Profitability Analysis.
Treasury Module
Cash Management
Treasury Management Market Risk Management
Funds Management
Enterprise Controlling
Executive Information System