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UNDERSTANDING ERP
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OBJECTIVE OF THE COURSE
To provide a brief Introduction about ERP
To give a Snapshot of the Current
Happenings in the ERP world
Develop a new perspective of ERP as a
Career Option
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TABLE OF CONTENT
1. Introduction1. IT Industry in India
2. ERP Growth in India
2. ERP Basics
1. Understanding ERP
2. Evolution of ERP
3. Central Concepts
4. Industry Verticals5. Major Modules and Best Practices
3. ERP Implementation
1. ERP Implementation Life Cycle
2. Common Myths and Pit falls
4. Pros and Cons
1. Benefits of ERP2. The Flip Side
5. ERP Market Condition
1. Current Market Scenario
2. Comparing top 5 ERP Players
6. Food for Thought
1. Challenges / Future Trends
2. ERP and Japanese Management3. Case Study and Presentation
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IT INDUSTRY IN INDIA
IT Industry emerging as Knowledge Industry Sectoral contribution to GDP increased from
1.2 % in 1998 to 7.1 % in 2011
Share of IT in total Indian exports increased
fto about 25% in FY2012 Direct and Indirect Job Opportunities were
estimated to approx. 10.8 million in 2010-11
TCS, Infosys, Cognizant, Wipro and HCL aretop 5 Indian IT Players
Do YouKnow ?
First IT Park was set up atSEEPZ in 1973 and
contributed to about 80 %of Indias S/W exports in
80s
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ERP GROWTH IN INDIA
What Statistics and Research say : ERP market to grow at 25 % CAGR reaching INR
983.4 Bn by 2015
India - third fastest growing enterprise software
market by 2016 IT Spend by Indian companies estimated to touch
Rs.1,910 billion in 2012, 16.4 % increase from2011
Strong Ecosystem : Rich presence of allinternational software and hardware providers,backed by system integrators, service providers,business partners and IT professionals
Do You
Know ?
1 out of every 10 software
dollars is spent on ERP
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What is ERP?
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UNDERSTANDING ENTERPRISE RESOURCE
PLANNING (ERP)
APICS (American Production and Inventory ControlSociety): ERP(Enterprise Resources Planning) as anaccounting-oriented computer information system thatassists enterprises to define and plan on the resourcesrequired during the operation process of purchase,
production, distribution, and strategic planning to satisfycustomers orders. It also effectively integrates andmanages these resources so as to enhance overallperformance and reduce costs.
ERP is a way to integrate the data and processes of anorganization into one single system for improving theBusiness Objectives
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Central Features:
Business process reengineering :
Database integration
Enhanced user interfacesData transport between companies
Extended and distributed applications
ERPs integrates the Applications,Databases, Interfaces and Tools.
Good to
Know
For any software system to be consideredERP, it must provide an organization with
functionality for two or more systems
CENTRAL CONCEPTS
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Corporate
Reporting
InventoryManagement
ManufacturingApplications
Financial
Applications
Service
Applications
Sales andDistribution
Human ResourceManagement
Central
Database
Front Office Back Office
C
US
T
O
M
E
R
S
S
U
PP
L
I
E
RS
(
T
i
er
I
&
2)
ERP BUSINESS FLOW
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EVOLUTION OF ERP
Emerged as a strategic tool because of
continuous improvement in the available
techniques to manage business and the fast
growth of information technology.
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EVOLUTION OF ERP
2000 Extended ERP / ERP II / ERP on Cloud
1990s
ERP
1980s
MRP II (Manufacturing Resource Planning)
1970s MRP (Material Requirement Planning)
1960s
Inventory Control Packages
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INDUSTRY VERTICALS
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ERP MAJOR MODULES :
HRM
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ERP MAJOR MODULES :
Supply Chain Management
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ERP MAJOR MODULES :
CRM
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ERP MAJOR MODULES :
Manufacturing
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ERP MAJOR MODULES :
Project management :
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IMPLEMENTING ERP, A GROUND REALITY
30% of those surveyed did not realize any sortof staff reductions after go-live
18% did not measure benefits after go-live
Atleast 1 in 4 companies have operationalproblems and/or stoppages because of thedisruptions caused by ERP.
So what does this mean ????
ERP benefits are by no means guaranteed
Risk of ERP disrupting an organization's coreoperations is a significant business risk
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ERP IMPLEMENTATION LIFE CYCLE
Short List Assessing Prepare Gap Analysis
Businessprocess
reengineeringDesigning
In-houseGuidance
Scrutiny
Training Support
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BENEFITS OF ERP
Improved customer service
Reduced operating expenses
Increased accuracy of costing
Increased market shares Reduced inventories
Shortened product lifecycles
Streamlined communication
Faster decision making
Increased competitive advantage
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FLIP SIDE
Good toKnow ?
Studies have indicated that only6% out of 500 companies felt thatthere ERP systems were effective
Limitation of ERP includes: Loss of Competitive Advantage due to
Business Process Re-engineering.
Problems associated with CustomisationsOver-engineered system relative to the
actual needs.
Huge Implementation CostsDirect as wellas Indirect
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MYTHS AND PITFALLS
One size fits all
Current system defines your needs
All functionality is created equal
You will have a no modification policy
ERP Implementation is an is an IT project
ERP is just for Manufacturing Organizations
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HOW TO MAKE ERP IMPLEMENTATION A
SUCCESS STORY
Make ERP to Complement The Business
Have a strongly determined organizational
structure
Cultural Readiness
Involve all StakeholdersUse ERP
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ERP IN INDIA
Scope in India
Service Sector, an area to be watched out
Matured Indian Economy demands Advanced
Technology
Indian railways, UID
Homecare Business Logic for Japan
GoodtoKnow
India to be third fastest growingenterprise software market by
2016
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ERP MARKET
SmallBusiness
ERP Leaders(Microsoft)
Medium Market
Leaders
(Epicor, Infor)
Fortune 2000
EnterpriseERP Leaders(SAP, Oracle)
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SAP
SAP is the largest and most recognized Fortune 1000, Global 5000 and
enterprise market share leader. The company has achieved its success
due to its extremely deep accounting and distribution software suites
along with tightly integrated financials, manufacturing, human resource,
payroll and customer relationship management software systems. While
the company claims that its retains significant middle market share, itsdefinition of 'middle market' is more in lines with other definition of the
enterprise market Over 37,000 application customers
More than 35,000 customers, 120 countries
Claim #1 CRM market share leader
Definite #1 ERP market share leader
Very impressive distribution/SCM
Several industry solutions
Netweaver, SQL and a chasm of technologies
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ORACLE
Oracle is the world's second largest business applications maker - and is
clearly out to take the lead role from SAP. Bolstered by its acquisitions of
PeopleSoft (with JD Edwards) and Siebel Systems, Oracle has collected
an impressive customer list and portfolio of intellectual property. Now the
real work to keep those customers and integrate those products (project
Fusion) is underway with results expected very soon. Expect severalmore acquisition and integration project announcements from Oracle
over the coming months.
Over 37,000 application customers
Claim #1 CRM market share leader
#2 ERP market share leader
30 year proven credibility
Outrageous flexibility
Technology is the Oracle stack
Priced at the high end
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FUTURE TRENDS / CHALLENGES
Combine ERP with CRM
Cloud deployment models change
application economics
Mobile technology accelerates business
processes
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ERP AND JAPANESE MANAGEMENT ERPan enemy of Streamlined Production ?
Years of Streamlining efforts can be washed by ERP Business ProcessRe-engineering,
Streamline Business through Lean and then standardise it with ERP
ERP
Based on Sales Forecast
Aims to track every activity andmaterial
Emphasis is on Planning
Data Dependent
LEAN
Based on Actual Demand
Aims to eliminate all kinds ofWaste
Emphasis is on settingProcesses right and thenContinual Improvement
Action Oriented
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CASE STUDY
China telecom