seminar final synopsis

8/7/2019 Seminar Final Synopsis

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INTRODUCTION TO ENTERPRISE RESOURCE

PLANNING (ERP)

SYNOPSIS

What is ERP?

Enterprise Resource Planning or ERP is an industry term for integrated, multi-moduleapplication software packages that are designed to serve and support multiple business functions.An ERP system can include software for manufacturing, order entry, accounts receivable and payable, general ledger, purchasing, warehousing, transportation and human resources. Evolvingout of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ERP modules may be able to interface with

an organization's own software with varying degrees of effort, and, depending on the software,ERP modules may be alterable via the vendor's proprietary tools as well as proprietary or standard programming languages.

Brief History of ERP

The focus of manufacturing systems in the 1960's was on Inventory control. Most of the software packages then (usually customized) were designed to handle inventory based on traditionalinventory concepts. In the 1970's the focus shifted to MRP (Material Requirement Planning)

systems that translated the Master Schedule built for the end items into time-phased netrequirements for the sub-assemblies, components and raw materials planning and procurement.

In the 1980's the concept of MRP-II (Manufacturing Resources Planning) evolved which was anextension of MRP to shop floor and Distribution management activities. In the early 1990's,MRP-II was further extended to cover areas like Engineering, Finance, Human Resources,Projects Management etc i.e. the complete gamut of activities within any business enterprise.Hence, the term ERP (Enterprise Resource Planning) was coined.

Why is it Necessary?

By becoming the integrated information solution across the entire organization, ERP systemsallow companies to better understand their business. With ERP software, companies canstandardize business processes and more easily enact best practices. By creating more efficient



processes, companies can concentrate their efforts on serving their customers and maximizing profit.

Market Leaders

The top five ERP vendors, SAP, Oracle Corporation, Peoplesoft, Inc. (now Oracle Corp.), JDEdwards & Company, and Baan International, account for 64 percent of total ERP marketrevenue. These vendors continue to play a major role in shaping the landscape of new targetmarkets, with expanded product functionality, and higher penetration rates. SAP dominates the$6.7 billion ERP applications market in Europe with 39% market share. Oracle and PeopleSoftcome second and third respectively, followed by SAGE Group and Microsoft BusinessSolutions.

The Future of ERP

Industry analysts expect that every major manufacturing company will buy the software, whichranges in cost -- with maintenance and training -- from hundreds of thousands of dollars for asmall company to millions for a large company. AMR Research of Boston says consolidationamong the major players will continue and intensify. ERP vendors are expected to put moreeffort into e-commerce, CRM and SCM initiatives, with leaders redirecting between 50% and75% of their R&D budget to these projects.

Popular ERP Products

SAP

SAP pioneered Enterprise Resource Planning. The company’s R/3 System, a family of integrated

components such as Production, Sales and Distribution, Controlling and Human Resources can be used as a whole or individually. R/3 is also internet-compatible and can be easily combinedwith other types of software or customers’ own systems.

Probably the only leader, SAP, according to AMR has a market share of 33% which is higher

compared to the next 4 competitors put together. The company has more than 19,300 employees

worldwide. The company’s R/3 system is in use in more than 107 countries



industry-specific solutions. The company has more than 3,000 customers, and an employeestrength of more than 6,000.

Its products include PeopleSoft 7.5, PeopleSoft Materials Management, PeopleSoftManufacturing, PeopleSoft Distribution, PeopleSoft Financials, PeopleSoft HRMS, PeopleSoft

Supply Chain Management And People Tools.

JD Edwards

J D Edwards, formed on March 17, 1977 was co-founded by Jack Thompson , Dan Gregory and

C. Edward McVaney making J D Edwards. Edward is the Chief Executive Officer who ownsmore than 30% of the company. The company has more than 4100 employees and operationsspanning 48 countries.

Advantages of ERP:

In the absence of an ERP system, a large manufacturer may find itself with many softwareapplications that do not talk to each other and do not effectively interface. Tasks that need tointerface with one another may involve:

• design engineering (how to best make the product)• order tracking from acceptance through fulfillment• the revenue cycle from invoice through cash receipt• managing interdependencies of complex Bill of Materials• tracking the 3-way match between Purchase orders (what was ordered), Inventory

receipts (what arrived), and costing(what the vendor invoiced)• the Accounting for all of these tasks, tracking the Revenue, Cost and Profit on a granular

level.

http://www.academictutorials.com/erp/erp-advantages.asp






Disadvantages of ERP:

Personnel turnover; companies can employ new managers lacking education in the company's ERP system, proposing changes in business practices that are out of synchronization with the best utilization of the company's selected ERP.

Customization of the ERP software is limited. Some customization may involve changing of the ERP software structure which is usually not allowed.

Re-engineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage.

ERP systems can be very expensive to install often ranging from 30,000 to 500,000,000 for multinational companies. ERP vendors can charge sums of money for annual license renewal that is unrelated to the

size of the company using the ERP or its profitability.

Conclusion:

The success of the system is fully dependent on how the workers utilize it. This means they must be properly trained, and a number of companies have attempted to save money by reducing thecost of training. Even if a company has enough money to implement ERP, they may not be ableto successfully use it if they do not have enough money to train their workers on the process of using it. One of the biggest problems with ERP is that it is hard to customize. Very fewcompanies can effectively use ERP right out of the box. It must be modified to suit their needs,

and this process can be both expensive and tedious. Even when a company does begin changingthe system, they are limited in what they can do.





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