Enterprise Resource planning unit 1 introduction

Prepared and presented by,
N. Ganesha Pandian,
Assistant professor,
Madurai School of management.
IIyearIIISemester
Academicyear2017-2018
1

 Overview of enterprise systems
 Evolution of ERP
 Risks and benefits
 Fundamental technology
 Issues to be consider in planning design
 And implementation of cross functional
integrated ERP systems
2

 Enterprise resembles a group of people with a
common goal. It has certain resources at its
disposal to achieve the goal.
 Enterprise system (ES) is an ideology of planning
and managing the resources of an entire
organization in an efficient, productive and
profitable manner, and is manifested in the form
of configurable information system packages.
3

 Information system is a set of people,
procedures and resources that collects,
transforms and disseminates information in an
organization.
 “An Information system (IS) can be organized
combination of people, hardware, software,
communication networks; and data resources
that stores and retrieves, transform and
disseminate information in an organization”
4

 People
 Procedure
 Data
5

 Collect data
 Store and process data
 Present information to
managers/users
6

 Business modeling is the activity of representing
processes of an enterprise, so that the current
process may be analyzed and improved
 Business modeling (creation of business model) is
considered as the first activity in any ERP project
 A business model describes the rationale of how
an organization creates, delivers and captures
value.
8

 Enterprise resource planning systems (ERP)
are management information systems that
integrate and automate many of the business
practices associated with the operations or
production aspects of a company
 These typically include manufacturing,
logistics, Distribution, inventory, shipping,
invoicing and accounting
9

 ERP is the technological backbone of e-
business, an enterprise-wide transaction
framework with links into sales order
processing, inventory management and
control, production and distribution planning
and finance.
10

 Before year 1960 : business has to depends
on classical inventory management of
scientific inventory control
 In Year 1960 : The concept of ERP was
limited to the fact that organizations want to
integrate functions and department s to
increase revenue
11

 Year 1970: the focus shifted to material
requirement – Material requirements planning
systems developed
 Year 1980: MRP II (materials requirement planning
II) included areas such as project management,
shop floor and distribution management
 Year 1990: Enterprise wide inter functional co-
ordination and integration
 Year 2000: Extended ERP came into market which
offers extended services
12

 Business Integration
 Flexibility
 Better analysis and planning
capabilities
 Use of latest technology
13

Feature of ERP
Accommodating
variety
Database creation
Supply chain
management
Resource
management
Seamless
integration
Integrated management
information
Integrated data
model 14

 Two-tier Architecture
 Three-tier Architecture
Any ERP Architecture has to designed for three
basic functional areas:
1. Database
2. Clients
3. Application components
15

Repository
GUI
Driver RDBMS
Logic
server
DB driver
Operating system
(UNIX,NT)
16

 Risk is a problem that has not yet happened
but which could cause some loss or threaten
the success of project if it did
Types of risks:
1. People risks
2. Process risks
3. Technology risks
17

 People – employees, management, implementation
team, consultants and vendors
Risks related to people:
1. Change management
2. Internal staff adequacy
3. Training
4. Employee relocation and re-training
5. Top management support
6. Discipline
7. Resistance to change
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 Programme management
 Business process reengineering
 Stage transition
 Benefit realization
19

 Software functionality
 Technological obsolescence
 Application portfolio management
 Enhancement /upgrades
20

 Reduction of lead time
 On-time shipment
 Reduction in cycle time
 Improved resource utilization
 Better customer satisfaction
 Improved supplier performance
 Increased flexibility
 Decision making capability
21

 Expense and time in implementation
 Difficulty implementing change
 Difficulty integrating with other systems
 Risks in using one vendor
 Risk of implementation failure
22

23
ERP
Technology
Customer
relationship
management
(CRM)
Business
Intelligence
Supply chain
management
(SCM)
Data
warehousing
Business
Process re-
engineering
Product life
cycle
management
Online
analytical
processing
(OLAP)
Data
Mining

 The term Business Intelligence (BI)
represents the tools and systems that play a
key role in the strategic planning process of
corporation
 Business intelligence systems gather data
from multiple sources and process by means
of advanced analytics and reporting
supporting decision making
24

 “A data warehousing is subject oriented
integrated non-volatile, time varying collection
of data in support of its decision making
process”
Characteristics:
1. Subject oriented
2. Integrity
3. Time variant
4. Non - volatile
25

 Data mining or Knowledge Discovery in Database
(KDD), is the nontrivial extraction of implicit,
previously unknown and potentially useful
information from data.
 This encompasses a number of different
technical approaches, such as clustering, data
summarization, learning classification rules,
finding dependency networks, analyzing changes
and detecting anomalies
26

 Online analytical processing (OLAP) is a method
of analyzing data in a multi-dimensional format,
often across multiple time periods, with the aim
of uncovering the business information
concealed within the data
 OLAP defined as “The dynamic synthesis,
analysis and consolidation of large volumes of
multidimensional data”
27

 Business process re-engineering is a fundamental
rethinking and radical redesign of business
processes to achieve dramatic improvements in
cost, quality, speed and service.
 BRP defined as “ BRP encompasses the
envisioning of new work strategies, the actual
process design activity, and the implementation
of the change in all its complex technological,
human and organizational dimensions.
28

 PLM is a strategic business approach that
applies a consistent set of business solutions
in support of the collaborative creation,
management, dissemination and use of
product definition information across the
extended enterprise and spanning from
product concept to end of life
29

 Supply chain management is the systematic,
strategic co-ordination of the traditional
business functions and tactics across these
business functions within a particular
company and across business within the
supply chain, for the purpose of improving
the long-term performance of the individual
companies and the supply chain as whole.
30

 CRM (Customer relationship management) is
a comprehensive strategy and process of
acquiring, retaining and partnering with
selective customers to create value for the
company and the selective customers to
create superior value for the company and
the customers
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1. Use of external consultants
2. Supplier relationship management
3. Business measures
4. User training
5. Project size
6. Length implementation time
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7. High initial investment
8. Unreasonable deadlines
9. Insufficient funding
10. Interface
11. Organizational politics
12. Unexpected gaps
13. Configuration difficulties
33

 Expense and time in implementation
 Difficulty implementing change
 Customization
 Difficulty integrating with other systems
 Risks in using one vendor
 Risk of implementation failure
 Management reporting needs
 Technological challenges
34

Enterprise Resource planning unit 1 introduction

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