1. ENTERPRISE RESOURCE PLANNING
{ERP}
RASHMI VAISHYA
PGDBM-I
ROLL NO - 14

2. History of organizational
systems
Calculation systems
1950-80
Single purpose
Eliminate tedious human
work
Examples: Payroll, General
ledger, Inventory
Technology used:
Mainframes, magnetic tapes,
batch processing
Functional systems
1975-20??
Use computers to improve
operations
Applications: HR, order
entry, manufacturing
resource planning
Technologies: Mainframes,
PC’s, LAN’s

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Problems with the above systems
Sharing of data between systems
Data duplication
Data inconsistency
Applications that don’t talk to one another
Limited or lack of integrated information
Isolated decisions lead to overall inefficiencies
Increased expenses
Solution to disparate systems?
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Integration
Consolidation
Right-sizing
Business Process Redesign
Enterprise wide system

4. Evolution of ERP

5. What is ERP???
 An ERP system is an attempt to integrate all
functions across a company to a single computer
system that can serve all those functions’ specific
needs
 “Integration” is the key word for ERP
implementation
 ERP is a set of integrated business applications,
or modules which carry out common business
functions such as general ledger, accounting, or
order management
 ERP is a process of managing all resources and
their use in the entire enterprise in a coordinated
manner.

6. ERP System

7. Components of ENTERPRISE MANAGEMENT
SYSTEMS (EMS)

8. What makes ERP different???
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Integrated modules
Common definitions
Common database
Update one module, automatically updates
others
 ERP systems reflect a specific way of doing
business
 Must look at your value chains, rather than
functions

9. Benefits of ERP
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Improved speed and efficiency, integration, flexibility
More complete access to information
Use of latest technology with fewer errors
Help in integrating applications for decision making and planning
Allow departments to talk to each other
Easy to integrate by using processed built into ERP software
Better Analysis & planning capabilities
Better management of resources reducing the cost
Customer satisfaction increase due to shorter delivery cycle
Business operations transparency between business partners &
customers
• Lower total costs in the complete supply chain
• Shorten throughput times
• Sustained involvement and commitment of the top management

10. ERP in Action
Staffing
Production
Inventory
Purchasing
Order Tracking
Sales
Planning

11. An ERP Example: Before ERP
Sales Dept.
Customer
Demographic
Files
Orders
Parts
Customers
Checks for Parts
Calls back “Not in stock”
“We ordered the parts”
Accounting
Files
Accounting
Sends report
Vendor
Purchasing
Files
Warehouse
Inventory
Files
Purchasing

12. An ERP Example: After
ERP
Orders
Parts
Customers
Sales Dept.
Inventory Data
If no parts,
order is placed
through DB
Accounting
Financial Data exchange;
Books invoice against PO
Order is submitted
to Purchasing.
Purchasing record
order in DB
Database
Books inventory
against PO
Order is placed
with Vendor
Warehouse
Vendor
Purchasing
Ships parts
And invoices accounting

13. Vendors

14. ERP Market
Total Revenues, 2000
Other
36%
SAP
32%
Geac Computer
3%
J.D. Edwards
5%
Peoplesoft
9%
Oracle
15%
Source: AMR Research, 2001

15. ERP Implementation Steps
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A user meeting is arranged to explain the ERP & process of implementation
The RDD & the DRDD is explained for understanding & approval
The resources to carry out the changes in the system
The DERP (Deviation ERP) solution is tested
The solution is tested on a sample data of substantial nature
The solution is then demonstrated to the users for their understanding &
confirmation
The users are trained to run the solution & resolve the difficulties in operations of
the system solution
The change over from the manual system to the ERP solution are planned, taking
care of cut off dates, the opening balances, the data transfers etc.
Log book of system usage is kept to make note of problems, solutions,
modifications
The document is updated with changes
The system performance is checked
Review meeting with users

16. Requirement
Analysis: RDD
1
Product mapping
to RDD
2
Fig: 9 steps is ERP
implementation
Gap analysis
For review
3
Functional
Implementation
5
ERP product
Configuration
4
Technical
Implementation
6
User training
Hand holding
Testing
User feedback
Review
7
Implement fully
8
Project & process
Review
9

17. How Do ERP Systems Work??

18. Hidden Costs of ERP
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Training
Integration and testing
Data conversion
Data analysis
Consultants
Replacing best and brightest staff after implementation
Implementation teams can never stop
Waiting for ROI
Post-ERP depression

19. Advantage
How
Reliable information access
Common DBMS, consistent and accurate
data, improved reports.
Avoid data and operations redundancy
Modules access same data from the
central database, avoids multiple data
input and update operations.
Delivery and cycle time reduction
Minimizes retrieving and reporting delays.
Cost reduction
Time savings, improved control by
enterprise-wide analysis of organizational
decisions.
Easy adaptability
Changes in business processes easy to
adapt and restructure.

20. Advantage
How
Improved scalability
Structured and modular design with
“add ons.”
Improved maintenance
Vendor-supported long-term contract as
part of the system procurement.
Global outreach
Extended modules such as CRM and
SCM.
E-Commerce, e-business
Internet commerce, collaborative culture

21. Disadvantage
How to overcome
Time-consuming
Minimize sensitive issues, internal politics
and raise general consensus.
Expensive
Cost may vary from thousands of dollars to
millions. Business process reengineering
cost may be extremely high.
Conformity of the modules
The architecture and components of the
selected system should conform to the
business processes, culture and strategic
goals of the organization.
Vendor dependence
Single vendor vs. multi-vendor
consideration, options for “best of breeds,”
long-term committed support.

22. Disadvantage
How to overcome
Extended ERP capability
Consider middle-ware “add-on” facilities
and extended modules such as CRM and
SCM.
Features and complexity
ERP system may have too many features
and modules so the user needs to
consider carefully and implement the
needful only.
Scalability and global outreach
Look for vendor investment in R&D, long
term commitment to product and
services, consider Internet-enabled
systems.

23. Survey of ERP
implementations
Done by ittoolbox.com

24. Overview
• 375 IT and business professionals
• 52% anticipate budget increases for new ERP
implementations/new modules
• SAP and PeopleSoft/J.D. Edwards were cited
as the most popular ERP packages
• 46% indicated that the main challenge to
successful ERP implementations was
inadequate definition of requirements and
resistance to change

25. How would you characterize your budget for new ERP
implementations/new modules deployments for 2004 compared
to your budget in 2003?

26. Who is directly responsible for
determining your ERP implementations/new
modules deployments?

27. Who are the other key decisionmakers/influencers in decisions to add
new ERP packages/new modules?

28. Do you currently have an ERP
package?

29. If your answer is "Yes", which ERP
package(s) do you currently use?

30. Are you considering adding new modules to
your existing ERP package?

31. If your answer is "Yes", which modules
are you planning to add?

32. If you plan to deploy a new ERP package
and/or add modules to your existing
packages, when would this implementation
take place?

33. Who do you partner with for new ERP
implementations and additions of new
modules?

34. What do you see as the main challenges to
successful ERP implementations within
your organization?