ENTERPRISE RESOURCE ENTERPRISE RESOURCE PLANNINGPLANNING

TANIYA BANERJEETANIYA BANERJEE

PRATAP SHEEPRATAP SHEE

DEFINATION OF ERPDEFINATION OF ERP

Software solution that addresses the Software solution that addresses the enterprise needs taking the process view enterprise needs taking the process view of an organization to meet the of an organization to meet the organizational goals tightly integrating all organizational goals tightly integrating all functions of an enterprise.functions of an enterprise.

WHAT IS ERP?WHAT IS ERP?

ERP systems are the software tools used to ERP systems are the software tools used to manage enterprise data.manage enterprise data.

Facilitates Company-wide integrated Information Facilitates Company-wide integrated Information Systems Covering all functional Areas.Systems Covering all functional Areas.

Performs core corporate activities and increases Performs core corporate activities and increases customer service augmenting Corporate Image.customer service augmenting Corporate Image.

Organizes & optimizes the data input Organizes & optimizes the data input methodologies systematicallymethodologies systematically..

A Typical StoryA Typical Story

Manufacturing

Sales Group

Finance

Corporate office

My growthwill be OK . No?

Human Resource

WHAT DOES ERP INTEGRATE?WHAT DOES ERP INTEGRATE?

DatabasesDatabases

ApplicationsApplications

InterfacesInterfaces

ToolsTools

Evolution of ERP systemsEvolution of ERP systems

Types of systems TimeTypes of systems Time Reorder point 1960sReorder point 1960s Material requirement 1970sMaterial requirement 1970s planning (MRP)planning (MRP) Manufacturing resource 1980sManufacturing resource 1980s planning (MRP-planning (MRP-II )II ) Enterprise resource 1990s and Enterprise resource 1990s and planning (ERP) onwardsplanning (ERP) onwards

Why ERP ?

Why ERP?Why ERP?

BusinessBusiness

Customer satisfactionCustomer satisfaction

Business Development- new areas, products, servicesBusiness Development- new areas, products, services

Ability to face competitionAbility to face competition

Efficient processes required to push the company to top gearEfficient processes required to push the company to top gear ITIT

Present software does not meet business needsPresent software does not meet business needs

Obsolete hardware/ software difficult to maintainObsolete hardware/ software difficult to maintain

ERP Implementation ERP Implementation

ERP Implementation phasesERP Implementation phases

1.1. Project PlanningProject Planning

2.2. Gap AnalysisGap Analysis

3.3. Business Process Re-engineering (BPR)Business Process Re-engineering (BPR)

4.4. ConfigurationConfiguration

5.5. Project Team TrainingProject Team Training

6.6. TestingTesting

7.7. End User Training End User Training

8.8. Going liveGoing live

9.9. Post-ImplementationPost-Implementation

1.1. Project Planning Project Planning

Designs the implementation processDesigns the implementation processProject plan is developed. Roles are Project plan is developed. Roles are

identified and responsibilities are identified and responsibilities are assigned.assigned.

This phase will decide when to begin the This phase will decide when to begin the project, how to do it and when the project project, how to do it and when the project is supposed to be completed.is supposed to be completed.

2.2. Gap Analysis Gap Analysis The gap between the existing company requirements The gap between the existing company requirements

and what the ERP package is offering is analyzed.and what the ERP package is offering is analyzed.

When the ERP package does not meet the company’s When the ERP package does not meet the company’s full requirements then the company can simply agree to full requirements then the company can simply agree to live without a particular function or one can opt for :-live without a particular function or one can opt for :-

a) Upgrade, ora) Upgrade, or b) Identifying a third party product that might fill b) Identifying a third party product that might fill

the gap, orthe gap, or c) Altering the ERP source code.c) Altering the ERP source code.

4.4. Configuration Configuration

A prototype of the actual business A prototype of the actual business processes of the company is used for processes of the company is used for thorough testing of the model in a thorough testing of the model in a controlled environment.controlled environment.

Configuring reveals not only the strengths Configuring reveals not only the strengths of a company’s business process but also- of a company’s business process but also- and perhaps more importantly - its and perhaps more importantly - its weaknesses.weaknesses.

3.3.Business Process Reengineering Business Process Reengineering

In-depth study of existing systems/processes is In-depth study of existing systems/processes is required before ERP is considered.required before ERP is considered.

This study brings out deficiencies of the existing This study brings out deficiencies of the existing system/process.system/process.

BPR attempts to re-structure and re-organize the BPR attempts to re-structure and re-organize the human resources, functional areas, Man-human resources, functional areas, Man-Machine interfaces in the organization.Machine interfaces in the organization.

Hence BPR attempts to maximize productivityHence BPR attempts to maximize productivity

5. 5. Implementation Team TrainingImplementation Team Training

This is the phase where the company This is the phase where the company trains its employees to implement and trains its employees to implement and later, run the system.later, run the system.

After implementation, the company to be After implementation, the company to be self-sufficient in running the ERP system, self-sufficient in running the ERP system, it should have a good in-house team that it should have a good in-house team that can handle the various situations.can handle the various situations.

6. 6. Testing Testing

This is the phase where one try to break This is the phase where one try to break the system.the system.

The test cases must be designed The test cases must be designed specifically to find the weak links in the specifically to find the weak links in the system and these bugs should be fixed system and these bugs should be fixed before going live.before going live.

7. 7. End-user TrainingEnd-user Training

In this phase the actual users of the In this phase the actual users of the system will be given training on how to use system will be given training on how to use the system.the system.

The employees who are going to use the The employees who are going to use the new system are identified. Their current new system are identified. Their current skills are noted and based on the current skills are noted and based on the current skill levels, they are divided into groups. skill levels, they are divided into groups. Then each group is given training on the Then each group is given training on the new system.new system.

8. 8. Going liveGoing live

The system is officially proclaimed The system is officially proclaimed operational.operational.

Once the system is ‘live’, the old system is Once the system is ‘live’, the old system is removed, and the new system is used for removed, and the new system is used for doing business.doing business.

9. 9. Post implementation phasePost implementation phase

There should be people, within the There should be people, within the company, who have the technical prowess company, who have the technical prowess to make the necessary enhancements to to make the necessary enhancements to the system as and when required. The the system as and when required. The system must be upgraded as and when system must be upgraded as and when new versions or new technologies are new versions or new technologies are introduced.introduced.

Advantages Of ERP

BENEFITS OF ERPBENEFITS OF ERP

Reduction of lead timeReduction of lead time Reduction in cycle timeReduction in cycle time Improve resource utilizationImprove resource utilization Better customer satisfactionBetter customer satisfaction Improved supplier performanceImproved supplier performance Increase flexibilityIncrease flexibility Reduced quality costsReduced quality costs On time deliveryOn time delivery Better analysis and planning capabilitiesBetter analysis and planning capabilities

DISADVANTAGES OF ERPDISADVANTAGES OF ERP

Cost is very high for implementation of ERP Cost is very high for implementation of ERP packagepackage

TimeTime 12-18 months implementation12-18 months implementation 1-3 years real transformation1-3 years real transformation TrainingTraining AcceptanceAcceptance Everyone gets brought down to the same Everyone gets brought down to the same

knowledge level knowledge level

HOW ERP HAS AFFECTED HOW ERP HAS AFFECTED CONSUMERS?CONSUMERS?

Consumers demands are met by faster Consumers demands are met by faster order to shipping datesorder to shipping dates

Tracking information on orders is available Tracking information on orders is available to consumersto consumers

Consumers can easily view inventory, Consumers can easily view inventory, sale prices, delivery dates from the sale prices, delivery dates from the company web pagecompany web page

Painless electronic transactionsPainless electronic transactions

ERP VENDORSERP VENDORS

Application

SAPSAP

SAP is an ERP (Enterprise Resource Planning) SAP is an ERP (Enterprise Resource Planning) system system

SAP = Systems, Applications and Products in SAP = Systems, Applications and Products in Data Processing Data Processing

German Based Company German Based Company One of Largest Independent Software Vendor in One of Largest Independent Software Vendor in

the Worldthe World ERP Market Leader (SAP R/3 and mySAP ERP)ERP Market Leader (SAP R/3 and mySAP ERP) 80% Fortune 500 Companies Use SAP80% Fortune 500 Companies Use SAP Over 18,500 Customers in 120+ CountriesOver 18,500 Customers in 120+ Countries Over 12 million usersOver 12 million users

SAP application modulesSAP application modules

1.1. Financial AccountingFinancial Accounting – collects all the data in – collects all the data in the company relevant to accounting.the company relevant to accounting.

2.2. Asset ManagementAsset Management – manage and supervise – manage and supervise individual aspects of fixed assets.individual aspects of fixed assets.

3.3. ControllingControlling – coordinating the contents and – coordinating the contents and procedures of a company’s internal processes.procedures of a company’s internal processes.

4.4. Production PlanningProduction Planning – plan and control – plan and control manufacturing activities.manufacturing activities.

5.5. Materials ManagementMaterials Management – supports the – supports the procurement and inventory functions occurring procurement and inventory functions occurring in day-to-day business operations.in day-to-day business operations.

SAP Application Modules SAP Application Modules

6.6. Plant Maintenance and Service Management Plant Maintenance and Service Management – provides – provides planning, control and processing of scheduled planning, control and processing of scheduled maintenance and to ensure availability of operational maintenance and to ensure availability of operational systems.systems.

7.7. Quality ManagementQuality Management – monitors and manages all – monitors and manages all processes relevant to quality assurance along the entire processes relevant to quality assurance along the entire supply chain.supply chain.

8.8. Project SystemProject System – designed to support planning, control – designed to support planning, control and monitoring of long term highly projects with defined and monitoring of long term highly projects with defined goal.goal.

9.9. Sales and DistributionSales and Distribution – optimize all the activities – optimize all the activities carried out in sales and distribution.carried out in sales and distribution.

10.10. Human Resource ManagementHuman Resource Management – planning and – planning and managing company’s human resource.managing company’s human resource.

System Wide Features of SAPSystem Wide Features of SAP

1.1. CustomizingCustomizing – it is the configuring of the system to – it is the configuring of the system to represent organization’s legal structure, reporting represent organization’s legal structure, reporting requirement and business processes.requirement and business processes.

2.2. Organizational elementOrganizational element – – * Financial* Financial

* Materials mgmt* Materials mgmt * Sales & distribution* Sales & distribution3.3. Master dataMaster data – it is records that remain in the database over – it is records that remain in the database over

an extended period of time.an extended period of time.4.4. Employee Self ServiceEmployee Self Service5.5. ClassificationClassification6.6. Match codesMatch codes7.7. SecuritySecurity

CONCLUSIONCONCLUSION

ERP integrate all aspects of a company into one ERP integrate all aspects of a company into one solution.solution.

There are both Pros and Cons, depending on There are both Pros and Cons, depending on the company one will out weigh the other.the company one will out weigh the other.

ERP is very time consuming and costly project.ERP is very time consuming and costly project. SAP is the major key vendor, with maximum SAP is the major key vendor, with maximum

market share.market share. ERP has a strong future and will continue to ERP has a strong future and will continue to

grow.grow.

Thank YouThank You