What is ERP ?Evolution Of ERP

Importance of ERPWhy implement ERP in business ?

Prepared By:

Praveen Venugopal

(ERP) is a process by which a company

(often a manufacturer) manages and

integrates the important parts of its business.

An ERP management information system

integrates areas such as planning,

purchasing, inventory, sales, marketing,

finance, human resources, etc.

Enterprise resource planning (ERP) is businessmanagement software that allows an organizationto use a system of integrated applications tomanage the business.

Being Specific ERP systems are large computersystems that integrate application programs inaccounting (i.e., accounts receivable), sales (i.e.,order booking), manufacturing (i.e., productshipping) and the other functions in the firm.This integration is accomplished through adatabase shared by all the application programs.

A typical ERP system will use multiple components

of computer hardware and software to achieve the

integration.

A key ingredient of most ERP systems is the use of a

unified database to store data for various system

modules.

Broken down into business processes

› HRM

› Distribution

› Financials

› Manufacturing

Enterprise resource

planning (ERP) is business

management software—usually a

suite of integrated applications—

that a company can use to store

and manage data from every

stage of business, including:

•Product planning, cost and

development

•Manufacturing

•Marketing and sales

•Inventory management

•Shipping and payment

At its core, ERP helps employees do their jobs more

efficiently by breaking down barriers between business

units. More specifically, an ERP solution:

Gives a global, real-time view of data that can enable

companies to address concerns proactively and drive

improvements

Improves financial compliance with regulatory standards

and reduces risk

Automates core business operations such as lead-to-

cash, order-to-fulfillment, and procure-to-pay processes

Enhances customer service by providing one source for

billing and relationship tracking.

Integrate financial information.

Integrate customer order information.

Standardize and speed up operations

processes.

Reduce inventory.

Standardize Human Resources information .

Common definitions.

Common database.

Update one module, automatically updates

others.

1. Enhance productivity, flexibility and customer responsiveness

By integrated core business processes together in one single application, it helps company maximize the efficiency of business process across the entire organization. Plant manufacturing can produces product faster. Increase on time delivery, Increase productivity, Increase ability to forecast demand to supplies, Increase order capacity, and improve customer service (Customer Relationship Management (CRM)).

2. Eliminate costs and inefficiencies

Using an ERP system to standardize business

processes can dramatically improve

company’s operation. ERP enable company to

manage relationship with vendor results in

lower cost for purchased items. Better resource

management results in more inventory turns

and decrease the level of inefficiencies.

3. Data consistency

Because an ERP system integrates all business

management functions, it decreases level of

inconsistency information from different

systems. Thus, by using ERP system,

managers can gather correct information and

make a right decision.

4. Extend your business using the Internet

By integrating all business functions together in

one system, it increases ability of a company to

use internet as part of the business strategy.

Web-enabled technology allows you to access

information, sell product, run business

processes, and communicate with customers

and partners at any time and from anywhere in

the world.

High cost.

Forced change of processes.

Very complex software.

Lack of trained people.

Flexibility of software system upgrades.

Implementation timelines.

Availability of internal technical knowledge and

resources.

Education and training.

Implementation strategy and execution.

Resistance to change.

Pre evaluation Screening

Evaluation Package

Project Planning

GAP analysis

Reengineering

Team training

Testing

Post implementation

Pre-selection Process

Package Evaluation

Project Planning

Gap Analysis Reengineering Configuration

Implementation

Team TrainingTesting End- user Training

Going Live

ERP implementation Life Cycle

Post – implementation

Phase

Decision for perfect package

Number of ERP vendors

Screening eliminates the packages that are not at all suitable for the company’s business processes.

Selection is done on best few package available.

Package is selected on the basis of different parameter.

Test and certify the package and also check the coordination with different department

Selected package will determine the success or failure of the project.

Package must be user friendly

Regular up gradation should available.

Cost

Designs the implementation process.

Resources are identified.

Implementation team is selected and task

allocated.

Special arrangement for contegencies

Most crucial phase.

Process through which company can create a model of where they are standing now and where they want to go.

Model help the company to cover the functional gap

Implementation is going to involve a

significant change in number of

employees and their job responsibilities.

Process become more automated and

efficient.

Takes place along with the process of implementation.

Company trains its employees to implement and later, run the system.

Employee become self sufficient to implement the software after the vendors and consultant have left.

This phase is performed to find the weak

link so that it can be rectified before its

implementation.

The work is complete, data conversion is done, databases are up and running, the configuration is complete & testing is done.

The system is officially proclaimed.

Once the system is live the old system is removed

The employee who is going to use the

system are identified and trained.

This is the maintenance phase.

Employees who are trained enough to handle problems those crops up time to time.

The post implementation will need a different set of roles and skills than those with less integrated kind of systems.

An organization can get the maximum value of these inputs if it successfully adopts and effectively uses the system.