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Inroduction to ERP system core functions and challenages.pptx

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Inroduction to ERP system core functions and challenages.pptx

  1. 1. Introduction to ERP system, core functions & challenges in ERP
  2. 2. Contents 1 2 3 4 5 Backdrop to ERP Solutions and concepts Introduction and a typical introduction process ERP Implementation and Benefits ERP Implementation and Challenges Case study and conclusion
  3. 3. Before ERP Transfer to Accounting office Transfer to accounting office Transfer to manager approval
  4. 4. Towards solution…. ??? ? ?
  5. 5. ERP system concept
  6. 6. ERP system concept Before ERP After the implementation of ERP
  7. 7. Introduction to ERP • ERP stands for Enterprise Resource Planning. • Enterprise Resource Planning (ERP) is business management software that allows an organization to use a system of integrated applications to manage the business. • Being specific ERP systems are large computer systems that integrate application programs in accounting (i.e., accounts receivable), sales (i.e., order booking), manufacturing (i.e., product shipping) and the other functions in the firm E-ENTERPRISE • Business Organization R-RESOURCE • Money • Manpower • Material • Machinery • Marketing • methods P-PLANNING • Effective utilization and optimization of resources
  8. 8. Evolution of ERP ERP II- extended ERP system 21st Century ERP- Integrated manufacturing with supply chain Late-1990’s ERP(Enterprise resource planning) Covering all the activities Mid-1990’s MRP II (Integrated system for manufacturing execution 1990’s MRP II (Manufacturing resource planning)+Financial accounting system 1980’s MRP(Material requirement planning) 1970’s System just for Inventory control 1960’s
  9. 9. Typical business process:  A typical enterprises has many departments/business units (BU’s)  These departments/Bu’s continuously communicate and exchange data with each other  The success of any organizations lie’s in effective communication and data exchange within the departments/BU’s as well as associated third party such as vendors, outsources and customers  Also known as Decentralized system Key Observation: Decentralized system Problems with Decentralized system:  Numerous disparate information system are developed individually over the time  Integrating the data becomes time and money consuming  Inconsistences and duplication of data High inventory, material and human resource cost
  10. 10. Typical business process:  Data is maintained at a Central location and is shared with various departments  Departments have access information /data of the other departments Benefits of Centralized system:  Eliminates the duplication, discontinuity and redundancy in data  Provides information across departments in real time  Provides control over various business processes  Increase productivity, better inventory management, promotes quality, reduced material cost and boosts profits  Better customers interactions, increased throughput, improves customer Key Observation: Centralized system
  11. 11. Core ERP module ER P Financial/ Accounting Manufacturing Management Production Management Quality Management Sales/ Marketing Supply chain Management Transportation management Customer relationship Management (CRM) E-Business
  12. 12. Core ERP module The Human Resource module assists the HR team in managing human resources efficiently Human resource module • HR management ERP modules enhance the employee experience- From initial recruitment to the time tracking. • A sub modules can include payroll, performance management, time tracking, benefits, compensation and workforce planning Self-service tools that allow managers and employees to enter time and attendance The finance module manages the entire inflow and outflow of money/capital. Finance & Accounting module • This module records all account-related transactions such as expenditures, balance sheets, ledgers, budgeting, bank statements, payment receipts, tax management, and so on. Financial reporting is a simple task for this ERP module. • Any financial data required for business operations is available with a single click in the Finance module. The purchase modules handle all of the processes involved in the procurement of items or raw materials for the organisation. Purchase Module • The purchase modules handles features such as supplier/vendor listing, supplier & item linking, sending quotation requests to vendors, receiving & recording quotations, quotation analysis, preparing purchase orders, tracking purchase items, preparing GRNs (Good Receipt Notes), and updating stocks, as well as various reports. • Purchase module is integrated with Inventory module & Engineering/production module for updating of stocks.
  13. 13. Core ERP module The CRM department helps to improve sales performance by providing excellent customer service and maintaining positive customer relationships Customer Relationship Management(CRM) module • The CRM modules assist in managing and tracking detailed customer information such as communication history, calls, meetings, details of purchases made by the customer, contract duration, and so on. • To improve sales opportunities, the CRM module can be integrated with the Sales module. The production module greatly aids the manufacturing industry in product delivery. Engineering / Production module • This module includes features such as production planning, machine scheduling, raw material usage, (Bill of material) preparation, tracking daily production progress, production forecasting, and actual production reporting. The SCM module manages the flow of product items from the manufacturer to the consumer and back again. Supply Chain Management (SCM) • A Manufacturers, Stockists, distributors, retailers, and other SCM roles are common. SCM includes demand and supply management, the sales return and replacement process, shipping and transportation tracking, and so on. • Today, many SMBs are struggling with process automation. ERP systems can be extremely beneficial to such
  14. 14. Core ERP module The ERP sales module manages all of the sales transactions. Sales module • A typical sales process includes processes such as sales query and inquiry analysis and handling, quotation drafting, accepting sales orders, drafting sales invoices with proper taxation, dispatch/shipment of material or service, and tracking pending sales orders. • The CRM module can use the sales module to create future opportunities and generate leads. The business intelligence(BI) supports informed decision making by everyone, from executives to line managers and accountants Business Intelligence • In general, Bi tools allow users to share and analyse the data collected across the enterprise and centralised in the ERP data base • BI can come in the forms of dashboard, automated reporting and analysis tools used to monitor the organizational business performance Integration • Key to the value of an ERP package is the integration between modules, so that all of the core business functions are connected. Information should flow across all the organization so that BI reports on organization- wide results
  15. 15. ERP implementation and Benefits
  16. 16. ERP project implementation What Is an ERP Implementation? ERP implementation describes the process of Planning, Configuring and Deploying an ERP. The process typically continues for a few months or may be couple of years in few cases. Implementing an enterprise resource planning (ERP) system can be a complex undertaking that affects many parts of the business. As with any major initiative, a carefully designed implementation plan is critical. To ensure a successful implementation, the organization needs to carefully define its requirements, determine how to redesign processes to take advantage of the system, configure the ERP system to support those processes and rigorously test it before deploying it to users. Successfully navigating all those steps on schedule requires careful planning and a structured, phased implementation approach. Dividing your implementation into phases, each with clear objectives, can maximize your success.
  17. 17. Implementation phases 1 2 3 4 5 6 ERP An ERP system integrates many functions across the business, such as financial management, human resources, sales and manufacturing, to deliver benefits such as increased productivity and efficiency. In contrast, diving into an ERP implementation without first establishing clear project direction, scope and structure increases the likelihood of encountering significant problems later. A typical ERP implementation plan can be divided into six phases, each with specific objectives. Every business is unique, so the phases may vary somewhat depending on the company, and they also may overlap. 1. Discovery & Planning 2. Design 3. Development 4. Testing 5. Deployment 6. Support & Updates
  18. 18. Key Benefits of implementing ERP • Higher management performance • Better accuracy and availability of information • Improved coordination • Precise planning • Enhanced reports • Scalability and flexibility • Cost-effectiveness • Easier access to management systems • Improved customer service • Better competitiveness on the market
  19. 19. Benefits of implementing ERP
  20. 20. ERP implementation challenges Outlines: • How ERP software works • Challenges of ERP implementation • Common ERP Mistakes/risks
  21. 21. ERP implementation challenges
  22. 22. ERP implementation challenges  How ERP software works  ERP software works by combining separate systems into a unified source of information and resources.  This enables managers to identify trends, optimise systems, and streamline decision making based on measurable metrics. This can benefit any organisation that decides to take the risk.  An ERP system streamlines your separate, complex business processes.  This is not an easy task.  Challenges of ERP implementation Inadequate Definition of Requirement Resistance to change Inadequate Resource Inadequate Training and Education Lack of Top MGMT support Unrealistic Expectations of benefits Miscalculation of time and efforts Poor communicatio n S/W business process incompatibility Poor Project design and MGMT Poor ERP package selection other
  23. 23. ERP implementation challenges Top 5 risk with ERP implementations: 1. Expensive (can costs 100 thousands to million of dollars) 2. Time consuming (can take months to years) 3. Great risk for the organization 4. Transfer of knowledge 5. Acceptance within the organization
  24. 24. ERP implementation challenges • Changes in business procedures, responsibilities and workload • As a result, the ERP implementation are times of high stress, long hours and uncertainty • Mid level managers must • Facilitate continual feedback from employees • Provide honest answer to their question and help to resolve their problems Change management: • General education about the ERP system for everyone • Massive amount of end user training before and during implementation • Follow-up training after the implementation • A training budget of 10% to 15% of the total implementation budget gives an organisation an 80% chance of success Extensive education and training • Clean-up data before cut-over • “Near enough is no longer good enough” • To command trust, the data in the system must be sufficiently available and accurate • Eliminate the old systems, including all informal systems Data clean up and data integrity • Following implementation, there will be an ongoing need for training and software support. • Ongoing communication with all system users is required, as is monitoring the new system's use. • Ongoing process of learning and adaptation that evolves over time Implementation is viewed as an ongoing process Best practices of ERP implementation:
  25. 25. ERP implementation challenges • Conclusion: The potential benefits of a properly chosen and implemented ERP system can be substantial. • Inventory costs are reduced by 25 to 30% on average, with raw material costs reduced by 25% • Lead-time for customers, production time, and production cost can be reduced BUT the cost of implementing can be quite high and risks are great
  26. 26. ERP-Key market insights • Lists of key players : • Oracle corporation (U.S), IBM Corporation (U.S), SAP SE (Germany), Workday, Ins. (U.S), Microsoft corporation (U.S), Sage group pls (U.K), Infor (U.S), Deltek (U.S), IFS Global (Sweden), Epicor (U.S) and Others Source: Enterprise Resource Planning [ERP] Software Market Size, 2029 (fortunebusinessinsights.com) Market drivers: Growing need to improve operational efficiency & Streamline business processes Market trends: Rising adoption of advanced technologies
  27. 27. SUCCESSFUL CASE STUDIES OF ERP IMPLEMENTATION • Choosing the Oracle ERP Cloud solution helped Western Digital merge three businesses. • In 2018, Walmart announced a five-year agreement with Microsoft for Microsoft Azure, which creates a framework for multiple ERP systems. • The TD Bank Group of companies also contracted with Microsoft Azure for a cloud framework that can integrate multiple capabilities and create more digital innovation opportunities.
  28. 28. • Western Digital is a technology company with offerings in the areas of data, data storage, data systems, and data solutions. • A merger of Western Digital, SanDisk, and Hitachi Global Storage Technologies (HGST) was a big challenge for the company around 2019. • With the merger, Western Digital wanted to centralize ERP so that all three companies could better work together. • After final deliberations among two providers, the company went with the Oracle ERP Cloud. • This choice also followed with an Oracle Suite of products that included solutions for performance management and analytics, all integrated together. WESTERN DIGITAL
  29. 29. The major benefits of the Oracle choice included integrations from the three businesses across the following: • Cost center management • Information technology • Human resource management • Payroll processing • Streamlined systems for forecasting business analytics and forecasts • Workforce planning • Comprehensive dashboards and automated reporting • Improved customer relationship analysis • Systems all running efficiently in the cloud for easier accessibility and document management WESTERN DIGITAL
  30. 30. As of August 2022, Walmart is one of the top fifteen largest companies in the United States by market capitalization. Sales for the company in FY 2022 were over $570 billion. The company operates globally with brick and mortar supercenters, discount stores, and neighborhood markets. It owns hundreds of brands, including the well known Sam’s Club. To successfully keep its shelves stocked it works with thousands of suppliers. Its e-commerce business is also a large and powerful organization(behemoth), with a long list of online seller partnerships. The complete size of Walmart’s business is one of its greatest advantages, but also challenges when it comes to ERP. Walmart works with many ERP providers. In 2018 however, it announced a strategic partnership for building out a digital transformation through Microsoft Azure. WALMART
  31. 31. • Benefits of the Microsoft Azure relationship include: • Building out a cloud-based enterprise system that serves as the framework for managing all of its resources • The capability to plug-in existing ERP applications to the Microsoft Azure framework • Integration of Microsoft 365 • Broader and more efficient opportunities for e-commerce • Broader opportunities for automated warehousing capabilities • Use of artificial intelligence for supplier relationships • Integration with SAP Hana and other legacy inventory management solutions • Integration with block chain-based solutions that are evolving WALMART
  32. 32. A migration to a sound cloud framework was also the driver for a relationship between TD Bank and Microsoft for the Microsoft Azure ERP. For the TD Bank Group, some of its biggest challenges are centered around digital storage and the digital experience for customers. With Microsoft Azure, the TD Bank Group will also integrate Office 365. TD BANK GROUP Some of the greatest benefits TD Bank will experience with its Azure relationship include: •Enhancements in derivative pricing and risk management for TD Securities •Integrations for its proprietary data and analytics database used in cross-bank reporting •Integrations with artificial intelligence developments through its subsidiary Layer •Greater opportunities for managing TD Bank customer relationships and digital experiences
  33. 33. Let’s Conclude • In summary, ERP roles are critical in all types of organisations, including manufacturing, retail, IT services, and banking. • Choosing the best ERP for the organisation or modifying an existing one still presents numerous challenges. • Regardless of the costs involved in its implementation, if we see its benefits, we will understand why it is so important in today's competitive world.
  34. 34. •Thank you

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