enterprise resource planning mis

8/8/2019 Enterprise Resource Planning MIS

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Enterprise resource planning (ERP)


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Enterprise resource planning (ERP) is an integrated computer-

based system used to manage internal and external resources

including tangible assets, financial resources, materials, and human

resources.

Enterprise Resource Planning


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It is a software architecture

Purpose is to facilitate the flow of information between all business functions inside the

boundaries of the organization Manage the connections to outside stakeholders.

Built on a centralized database and normally utilizing a common computing platform,

ERP systems consolidate all business operations into a uniform and enterprise wide system

environment.

Enterprise Resource Planning


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History

The term "Enterprise resource planning" originally derived from ManufacturingResource Planning (MRP II) that followed material requirements planning (MRP). MRPevolved into ERP when "routings" became a major part of the software architecture and acompany's capacity planning activity also became a part of the standard software activity.

The ERP was first employed by research and analysis firm Gartner Group in 1990.

ERP systems saw a large boost in sales in the 1990s as companies faced theY2K problem in theirlegacy systems. Many companies took this opportunity to replace such information systems withERP systems.

ERP II, a term coined in the early 2000s, is often used to describe what would be the nextgeneration of ERP software.This new generation of software is web-based and allows bothemployees and external resources (such as suppliers and customers) real-time access to thesystem's data


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What is ERP used for?


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Components in detail..

y Transactional Backboney Financials

y Distribution

y Human Resources

y Product lifecycle management

y Advanced Applications Customer Relationship Management (CRM)

Supply chain management Purchasing

Manufacturing

Distribution

Warehouse Management System

Management Portal/Dashboard Decision Support System


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Commercial applications

y Manufacturing Engineering, bills of material, scheduling, capacity,

workflow management, quality control, cost management, manufacturing

process, manufacturing projects, manufacturing flow

y Supply chain management Order to cash, inventory, order entry,

purchasing, product configuration, supply chain planning, supplier

scheduling, inspection of goods, claim processing, commission calculation

y Financials General ledger, cash management, accounts payable,

accounts receivable, fixed assets


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Commercial applications

y Financials General ledger, cash management, accounts

payable, accounts receivable, fixed assets

y Project management Costing, billing, time and expense,

performance units, activity management

y Human resources Human resources, payroll, training, time

and attendance, rostering, benefits


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y Data services Various "self-service" interfaces for customers,

suppliers, and/or employees

y Access control Management of user privileges for various

processes


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Why implement an ERP System?

y To support business goals

y Integrated, on-line, secure, self-service processes for business

y Eliminate costly mainframe/fragmented technologies

y Improved Integration of Systems and Processes

y Lower Costs

y Empower Employees

y Enable Partners, Customers and Suppliers


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How should we implement ERP Systems?y People

y Project Structure

y Should be aligned to processes

y

Processy Implementation Process (outlined in detail)y Adapt your processes to those of the ERP.

y Technologyy Hardware

y Software

y I

ntegrated Systems


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Process

Design

y Prepare various functional reports - specifies current scenario and wish list

y Prepare Design document which specifies how the system is going to worky Prepare test scripts to be followed on system testing

y Map out the interface paths to various modules

Challenge :INFORMATION SHARING - Availability of staff


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Process

Transition

y Train users on their specific areas

y Assist in test data compilation and system testing by usersy Finalise the Live system and captured opening balances

Challenge :USER RESISTANCE Understanding and acceptance

Data preparation


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Technology

y Technology is an enabler, not the driver (it is there to assist the

organisation to achieve business goals)

y It is a means to an end, not the end itself. Businesss must use the

latest technology or refine their existing technologies to allign with

the implementation of ERP within an organisation.


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Different phases of ERPy Pre evaluation Screening

y Evaluation Packagey

Project Planningy GAP analysis

y Reengineeringy Team trainingy T

estingy Post implementation


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Pre-selection Process

Package Evaluation

Project Planning

Gap Analysis ReEngineering Configuration

Implementation

Team TrainingTesting End- user Training

Going Live

Post implementation

Phase

ERP Implementation Life Cycle


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Pre evaluation screeningy Decision for perfect package

y Number of ERP vendors

y

Screening eliminates the packages that are not at all suitable forthe companys business processes

y Selection is done on best few package available.


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Package Evaluationy Package is selected on the basis of different parameter.

y Test and certify the package and also check the coordination with

different departmenty Selected package will determine the success or failure of the

project.

y Package must be user friendly.

y

Regular up gradation should available.y Cost must be within the pre decided budget limits.


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Project planningy Designs the implementation process.

y Resources are identified.

y Implementation team is selected and task allocated.y Special arrangement for contingencies.


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Gap analysisy Most crucial phase.

y Process through which company can create a model of where they

are standing now and where they want to go.y Model help the company to cover the functional gap


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ReEngineeringy Implementation is going to involve a significant change in number

of employees and their job responsibilities.

yProcess become more automated and efficient.


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Team Trainingy Takes place along with the process of implementation.

y Company trains its employees to implement and later, run thesystem.

y Employee become self sufficient to implement the software after

the vendors and consultant have left.


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Testing

y This phase is performed to find the weak link so that it

can be rectified before its implementation.


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Going Livey The work is complete, data conversion is done, databases are up

and running, the configuration is complete & testing is done.

y T

he system is officially proclaimed.y Once the system is live the old system is removed


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End User Training

y The employee who is going to use the system are identified and

trained.


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Post Implementationy This is the maintenance phase.

y Employees who are trained enough to handle problems those

crops up time to time.y The post implementation will need a different set of roles and

skills than those with less integrated kind of systems.


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Arch

itecture of ERP


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Advantage of ERP Systems

What benefit

y Reliable information access

y Avoid data and operations redundancy

y Delivery and Cycle time reduction

y Cost reduction

y

Easy adaptability

How

y CommonDBMS,Consistent and accuratedata, improved reports.

yModules access same data from thecentral database, avoids multiple datainput and update operations.

y Minimizes retrieving and reportingdelays

y Time savings, improved control byenterprise-wide analysis oforganizational decisions.

y Changes in business processes easy toadapt and restructure.


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Advantage of ERP Systems

y Improved scalability

y Improved maintenance

y GlobalOutreach

y E-Commerce, E-Business

y Structured and modular design

with "add-ons"

y Vendor supported long term

contract as part of the system

procurement.

yExtended modules such as CRMand SCM

y Internet Commerce,Collaborative culture.


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Disadvantages of ERP Systems

y Time consuming

y Expensive

y Conformity of the modules

y Vendor dependence

y Minimize sensitive issues, internal politics andraise general consensus.

yCost may vary from thousands of dollars tomillions.Business process re-engineering costmay be extremely high.

y The architecture and components of theselected system should conform to the businessprocesses,culture and strategic goals of theorganization.

y Single vendor vs multi-vendor consideration, optionsfor "best of breeds", long term committed support.

Disadvantages How to overcome


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