ENTERPRISE RESOURCE

PLANNING
 TODAY’S AGENDA

•Introduction to ERP
•Functional areas and Business
Processes
•Characteristics of ERP
•ERP Implementation
•Integrated Management Information
•Implementation cost
 INTRODUCTION TO ERP

Information technology has transformed the

way we live in and the way we do business.
Now the user knows that a PC can do many
more things rather then just typing a letter in
a word processing software or making
balance sheets in Excel.
 INTRODUCTION TO ERP
WHAT IS ERP?

Enterprise Resource Planning (ERP) programs are core

software used by companies to coordinate information in every
business area. ERP programs help manage the company-wide
business process, using a common database and shared
management reporting tools. (According to Monk and Wagner, 2012)

Software is a generic term used to refer to

applications, scripts and programs that run on a device.
 INTRODUCTION TO ERP
WHAT IS ERP?

ERP is a kind of software system that

helps you run your entire business, including
processes in finance, manufacturing, supply
chain, services, procurement, and more.
(https://insights.sap.com/what-is-erp/)
 INTRODUCTION TO ERP
ORIGIN ERP

In 1990 Gartner Group first employed the acronym ERP

as an extension of material requirements planning
(MRP). ERP came to represent a larger whole reflecting
the evolution of application integration beyond
manufacturing.
ERP systems typically handle the manufacturing, logistics,
distribution, inventory, shipping, invoicing, and accounting
for a company.
 INTRODUCTION TO ERP
ORIGIN ERP

Enterprise Resource Planning or ERP

software can aid in the control of many
business activities, like sales, marketing,
delivery, billing, production, inventory
management, quality management, and
human resource management.
 INTRODUCTION TO ERP
WHY ERP?

•To solve the existing problems (incompatible

information that were developed over the past
several years up to data locked up among the diverse
systems )
•To explore new opportunities (almost instant
access of transactional information across the
corporation, operating as an agile entity in improving
production, customer service and customer
satisfaction)
 INTRODUCTION TO ERP
THE IDEAL ERP SYSTEM

An ideal ERP system is when a single database is

utilized and contains all data for various
software modules. These software modules can
include:
Manufacturing, Finance, Human Resources, Supply
Chain Management, Projects, Customer Relationship
Management, and Data Warehouse
 INTRODUCTION TO ERP
ERP GROWTH RINGS

From a business
perspective, ERP
has expanded from
coordination of
manufacturing
processes to
integrating
enterprise-wide
backend processes.
 INTRODUCTION TO ERP
HISTORY OF ERP

Today – in the era of digital transformation – businesses

are increasingly relying on artificial intelligence and
other innovations to automate their business processes
and stay competitive.
 INTRODUCTION TO ERP
REASONS FOR GROWTH

ERP systems bring all business operations into

one uniform and enterprise-wide system
environment.
oSupport Business Growth Requirements
oProvide Flexible Decision Support
oEliminate Legacy Systems
oTake Advantage of Untapped Markets
 •Functional areas of FUNCTIONAL AREAS
operations (also known as & BUSINESS PROCESSES
business areas) are broad
categories of business activities.
Most companies have four main
functional areas of operations:
Marketing and Sales (M/S),
Supply Chain Management
(SCM), Accounting and Finance
(A/F), and Human Resources
(HM).
•Each area comprises various
narrower business functions,
which are activities specific to
that functional area of operation
A business process is
a collection of activities
that takes one or more
kinds of input and
creates an output, such
as a report or forecast,
that is of value to the
customer.
 BUSINESS
FUNCTIONS BUSINESS PROCESS
•refers to a principal activity or •a collection of tasks linked
group of related activities to deliver a service or
carried out by an organization product to a client
•a department or area of activity •sequence of activities
•broad areas of responsibility •are designed to achieve
•ongoing areas of operation specific goals
within a business •with defined start and end
point
 CHARACTERISTICS OF ERP

✔ An integrated system that operates in real time

w/out relying on periodic updates
✔A common database which supports all applications
✔A consistent look and feel throughout each module
✔Installation of the system without elaborate
application/data integration by the IT department.
 CHARACTERISTICS OF ERP_PRO’S

1. Improved efficiency: This is achieved by reduction of

cycle time, inventory reduction, order fulfillment, improving
support to supply chain, management, etc.

2. Better decision making: The processes governs days

to day operations and produces reports in structured form,
which are further used by top management of organization
to meet with its basic goals and objectives and to monitor
the whole organization.
 CHARACTERISTICS
CHARACTERISTICS OF
OFERP_PRO’S
ERP_PRO’S

3. Quick response time to customers: Because of its

comprehensive nature the system avoids unnecessary duplication
and redundancy in data gathering and storage. Thus the response
time to customer is reduced.
4. Business integration: ERP creates the common database
across the organization which is used by various departments
within the organization. This business integration capabilities
makes it easy to group business details in real time and carry out
various types of management decision in time.
 CHARACTERISTICS
CHARACTERISTICS OF
OFERP_PRO’S
ERP_PRO’S

6. Analysis and planning capabilities: Though different

types of decisions support systems and simulation function,
ERP makes the analysis of data easier.
7. Technology support: Utilization of latest development
in Information technology is quickly adapted by the ERP
packages. The ERP packages itself design in a way that they
can incorporate with latest technology even during the
customization, maintenance and expansion phases..
 CHARACTERISTICS
CHARACTERISTICS OF
OFERP_CON’S
ERP_CON’S

1. High Investment: At this time, only large corporations can

truly take advantage of the benefits offered by this
technology.
2. Cost of Training: The success of the system is fully
dependent on how workers utilize it. A company will not be
successful to implement ERP if they do not have enough
money to train their employees.
3. Alteration: Most ERP vendors will not allow the structure
of the software to be altered. They can charge additional
license fees or put strain on companies with less resources to
pay them.
 INTEGRATED DATA MODEL

Enterprise Resource Planning (ERP)

software helps integrate management, staff,
and equipment, combining all aspects of the
business into one system in order to
facilitate every element of the manufacturing
process.
 ERP IMPLEMENTATION
To implement ERP systems, companies often seek the help of an ERP
vendor or of third-party consulting companies. These firms typically
provide three areas of professional services: consulting, customization
and support.
The following are the steps of a data migration strategy that can help with the
success of an ERP implementation:
1. Identifying the data to be migrated
2. Determining the timing of data migration
3. Generating the data templates
4. Freezing the tools for data migration
5. Deciding on migration related setups
6. Deciding on data archiving
 ERP IMPLEMENTATION
ERP IMPLEMENTATION

Challenges in ERP implementation:

1. Convincing People
2. Techno Stress
3. High Cost
4. Return on Investment
5. Downsizing
 INTEGRATED MANAGEMENT INFORMATION

In any information system there is a logical flow of information

that is, in any information system, data supplied to the system
(input), are manipulated (processed) and transformed into
information (output). The simple IPO (Input – processed –
output) model has been used.

Information system includes the people, procedures, software, and

computers that store, organize, analyze, and deliver information.
 INTEGRATED
INTEGRATEDMANAGEMENT
MANAGEMENT INFORMATION
INFORMATION

Through the processing technology of information system data

has been transformed into useable information.

Management Information System (MIS) is an integrated

information system, which is one of the popular subsystem or
technology used in ERP. It is a system, which provides
information supports for the decision – making in the
organization.
 SUMMARY
•ERP is the abbreviation of Enterprise Resource
Planning and means, the techniques and concepts
for integrated management of businesses as a
whole from the viewpoint of the effective use of
management resources to improve the efficiency of
enterprise management.
•ERP provides the backbone for an enterprise-wide
information system.
 SUMMARY
•At the core of this enterprise software is a central
database which draws data from and feeds data into
modular applications that operate on a common
computing platform, thus standardizing business processes
and data definitions into a unified environment.
•With an ERP system, data needs to be entered only once.
•The system provides consistency and visibility or
transparency across the entire enterprise.
 SUMMARY

•A primary benefit of ERP is easier access to

reliable, integrated information.
•A related benefit is the elimination of redundant
data and the rationalization of processes, which
result in substantial cost savings.