E nterprise R esource P lanning (ERP). ERP General Concepts .
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Transcript of E nterprise R esource P lanning (ERP). ERP General Concepts .
Enterprise Resource
Planning (ERP)
ERP – General Concepts
What is ERP? The Current Scenario Why ERP? Definition Evolution Expectations BPR & ERP BPR – The StepsE
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What is ERP?
facilitates company-wide integrated information systems, covering all functional areas
performs core Corporate activities and increases customer service
ERP is a solution, which
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The Current Scenario
Islands of Information Difficult to get timely & accurate information Heterogeneous Hardware & Software
platforms & practices Poor connectivity between different
organizational locations Sticking with obsolete technology Resist to change Lack of proven man-power to develop
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Information Islands
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Companies before ERP Systems
New Printer Purchasing Process
1. Purchase order form for a new printer
2. Head of Department Confirmation- Faculty Head
3. Purchase order document sent to E.M.U. Account Office
4. Account Office Secretary sents the purchase order to the Responsibles
5. Purchase order- Responsible personal Confirmation
6. Purchasing department- Manager Confirmation
7. Transfer to Finance Department Secretary for processing
8. Finance Department Responsible’s Confirmation
9. Transfer to Rector’s Office
10.Rector’s Secretary- Confirmation
11.Confirmation Transfer, to Purchase Department Secretary
12.Purchase Responsible personal commends with Purchase:
Example: Before ERP Systems
Transfer to Accounting
Office
Transfer to Finance Department
Transfer to Manager
Transfer to Accounting Office
Companies after ERP Systems
Online Data Flow decreases the process time
Fast & Online Confirmation
Less Paperwork
No need for folder storage
Database Security
Less Employee needed
Easy Financial Management
Better Inventory Management
Why ERP?
For Management – to know what is happening in the company
One solution for better Management For cycle time reduction To achieve cost control & low working capital To marry latest technologies To shun the geographical gaps To satisfy the customers with high expectations To be Competitive & for survival
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ERP - Definition
“Software solution that addresses theEnterprise needs, taking a process view ofthe overall organization to meet the goals,by tightly integrating all functions andunder a common software platform”
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Evolution of ERP
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 Mgnt.)
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)E
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ERP – Expectations
Integrating all the functions
Integrating the systems running in all the locations
Transparency of information using a single data source across the organization
Software must be responsive Modular Flexible Easy to add functionalities Provide growth path
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BPR & ERP
Business Process Re-engineering [BPR] brings out thedeficiencies of the existing setup
BPR and ERP will give way to implement newsystems and the long pending improvements in theexisting systems
BPR may be time consuming but the scope can berestricted & controlled by the Management
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BPR - Steps
Step 1 Step 2 Step 3
Understand Simplify/Improve
Automate
Understand the existing systems associated with all the functionalities
Draft & frame the possibilities & ways to simplify or Improve or eliminate the processes
Implement with the help of ERP
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ERP – Options
OPTION 1 – MAKE [Using Internal resources]
Developing a custom-built ERP package, specific to therequirements of the organization, with the help of thein-house IT department
OPTION 2 - BUY
Going for Tailor-made ERP packages available in the market likeSAP, Oracle applications, Baan, PeopleSoft etc.
OPTION 3 – MAKE [using External resources]
Developing a custom-built ERP package, specific to therequirements of the organization, with the help of a software solution provider
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Building ERP solutions using Internal Sources
ERP – Building using Internal resources – The Facts Lack of adequate & qualified manpower Not driven with clear focus on expectations, time & cost Poor software project management Lack of seriousness with the Management & the IT Team High employee turnover Lot of schedule gaps during Project execution Normally project life is more Frequent change in the scope with the approval of the Management
Key Process Integration
via ERP
Key Process Integration
via ERP
Product Lifecycle
Management
Product Lifecycle
Management
Supply Chain Management
Supply Chain Management
CustomerManagement
CustomerManagement
Supplier Collaboration
Supplier Collaboration
Design Partners
Design Partners
Consumers and Channels
Consumers and Channels
Beyond ERP