Inroduction to ERP system core functions and challenages.pptx

Introduction to ERP system, core functions &
challenges in ERP

Contents
1 2 3 4 5
Backdrop to ERP
Solutions and
concepts
Introduction
and a typical
introduction
process
ERP
Implementation
and Benefits
ERP
Implementation
and Challenges
Case study and
conclusion

Before ERP
Transfer to Accounting office
Transfer to
accounting office
Transfer to manager
approval

Towards solution….
???
?
?

ERP system concept
Before ERP After the implementation of ERP

Introduction to ERP
• ERP stands for Enterprise Resource Planning.
• Enterprise Resource Planning (ERP) is business management software that allows an organization to
use a system of integrated applications to manage the business.
• Being specific ERP systems are large computer systems that integrate application programs in
accounting (i.e., accounts receivable), sales (i.e., order booking), manufacturing (i.e., product
shipping) and the other functions in the firm
E-ENTERPRISE
• Business
Organization
R-RESOURCE
• Money
• Manpower
• Material
• Machinery
• Marketing
• methods
P-PLANNING
• Effective
utilization and
optimization of
resources

Evolution of ERP
ERP II- extended ERP system
21st Century
ERP- Integrated manufacturing with supply chain
Late-1990’s
ERP(Enterprise resource planning) Covering all the activities
Mid-1990’s
MRP II (Integrated system for manufacturing execution
1990’s
MRP II (Manufacturing resource planning)+Financial accounting system
1980’s
MRP(Material requirement planning)
1970’s
System just for Inventory control
1960’s

Typical business process:
 A typical enterprises has many departments/business units (BU’s)
 These departments/Bu’s continuously communicate and exchange data with
each other
 The success of any organizations lie’s in effective communication and data
exchange within the departments/BU’s as well as associated third party such as
vendors, outsources and customers
 Also known as Decentralized system
Key Observation: Decentralized system
Problems with
Decentralized
system:
 Numerous disparate information system are developed individually over the time
 Integrating the data becomes time and money consuming
 Inconsistences and duplication of data
High inventory, material and human resource cost

Typical business process:
 Data is maintained at a Central location and is shared with various departments
 Departments have access information /data of the other departments
Benefits of Centralized system:
 Eliminates the duplication, discontinuity and redundancy in data
 Provides information across departments in real time
 Provides control over various business processes
 Increase productivity, better inventory management, promotes quality, reduced
material cost and boosts profits
 Better customers interactions, increased throughput, improves customer
Key Observation: Centralized system

Core ERP module
ER
P
Financial/
Accounting
Manufacturing
Management
Production
Management
Quality
Management
Sales/
Marketing
Supply chain
Management
Transportation
management
Customer
relationship
Management (CRM)
E-Business

Core ERP module
The Human Resource module assists the HR team in managing human resources
efficiently
Human resource module
• HR management ERP modules enhance the employee experience- From initial recruitment to the time tracking.
• A sub modules can include payroll, performance management, time tracking, benefits, compensation and
workforce planning
Self-service tools that allow managers and employees to enter time and attendance
The finance module manages the entire inflow and outflow of money/capital.
Finance & Accounting
module
• This module records all account-related transactions such as expenditures, balance sheets, ledgers, budgeting,
bank statements, payment receipts, tax management, and so on. Financial reporting is a simple task for this ERP
module.
• Any financial data required for business operations is available with a single click in the Finance module.
The purchase modules handle all of the processes involved in the procurement of
items or raw materials for the organisation.
Purchase Module
• The purchase modules handles features such as supplier/vendor listing, supplier & item linking, sending quotation
requests to vendors, receiving & recording quotations, quotation analysis, preparing purchase orders, tracking
purchase items, preparing GRNs (Good Receipt Notes), and updating stocks, as well as various reports.
• Purchase module is integrated with Inventory module & Engineering/production module for updating of stocks.

Core ERP module
The CRM department helps to improve sales performance by providing
excellent customer service and maintaining positive customer
relationships
Customer Relationship
Management(CRM) module
• The CRM modules assist in managing and tracking detailed customer information such as communication
history, calls, meetings, details of purchases made by the customer, contract duration, and so on.
• To improve sales opportunities, the CRM module can be integrated with the Sales module.
The production module greatly aids the manufacturing industry in product delivery.
Engineering / Production
module
• This module includes features such as production planning, machine scheduling, raw material usage, (Bill of
material) preparation, tracking daily production progress, production forecasting, and actual production
reporting.
The SCM module manages the flow of product items from the manufacturer to the
consumer and back again.
Supply Chain Management
(SCM)
• A Manufacturers, Stockists, distributors, retailers, and other SCM roles are common. SCM includes demand and
supply management, the sales return and replacement process, shipping and transportation tracking, and so
on.
• Today, many SMBs are struggling with process automation. ERP systems can be extremely beneficial to such

Core ERP module
The ERP sales module manages all of the sales transactions.
Sales module
• A typical sales process includes processes such as sales query and inquiry analysis and handling, quotation
drafting, accepting sales orders, drafting sales invoices with proper taxation, dispatch/shipment of material or
service, and tracking pending sales orders.
• The CRM module can use the sales module to create future opportunities and generate leads.
The business intelligence(BI) supports informed decision making by everyone, from
executives to line managers and accountants
Business Intelligence
• In general, Bi tools allow users to share and analyse the data collected across the enterprise and centralised in
the ERP data base
• BI can come in the forms of dashboard, automated reporting and analysis tools used to monitor the
organizational business performance
Integration
• Key to the value of an ERP package is the integration between modules, so that all of the core business
functions are connected. Information should flow across all the organization so that BI reports on organization-
wide results

ERP implementation
and Benefits

ERP project implementation
What Is an ERP Implementation?
ERP implementation describes the process of Planning, Configuring
and Deploying an ERP. The process typically continues for a few
months or may be couple of years in few cases.
Implementing an enterprise resource planning (ERP) system can be
a complex undertaking that affects many parts of the business. As
with any major initiative, a carefully designed implementation plan
is critical.
To ensure a successful implementation, the organization needs to
carefully define its requirements, determine how to redesign
processes to take advantage of the system, configure the ERP
system to support those processes and rigorously test it before
deploying it to users. Successfully navigating all those steps on
schedule requires careful planning and a structured, phased
implementation approach.
Dividing your implementation into phases, each with clear
objectives, can maximize your success.

Implementation phases
1
2
3
4
5
6 ERP
An ERP system integrates many functions across the
business, such as financial management, human resources,
sales and manufacturing, to deliver benefits such as
increased productivity and efficiency.
In contrast, diving into an ERP implementation without first
establishing clear project direction, scope and structure
increases the likelihood of encountering significant
problems later.
A typical ERP implementation plan can be divided into six
phases, each with specific objectives. Every business is
unique, so the phases may vary somewhat depending on
the company, and they also may overlap.
1. Discovery & Planning
2. Design
3. Development
4. Testing
5. Deployment
6. Support & Updates

Key Benefits of implementing ERP
• Higher management performance
• Better accuracy and availability of information
• Improved coordination
• Precise planning
• Enhanced reports
• Scalability and flexibility
• Cost-effectiveness
• Easier access to management systems
• Improved customer service
• Better competitiveness on the market

ERP implementation challenges
Outlines:
• How ERP software works
• Challenges of ERP implementation
• Common ERP Mistakes/risks

 How ERP software works
 ERP software works by combining separate systems into a unified source of information and
resources.
 This enables managers to identify trends, optimise systems, and streamline decision making based on
measurable metrics. This can benefit any organisation that decides to take the risk.
 An ERP system streamlines your separate, complex business processes.
 This is not an easy task.
 Challenges of ERP implementation
Inadequate
Definition of
Requirement
Resistance to
change
Inadequate
Resource
Inadequate
Training and
Education
Lack of Top
MGMT
support
Unrealistic
Expectations
of benefits
Miscalculation
of time and
efforts
Poor
communicatio
n
S/W business
process
incompatibility
Poor Project
design and
MGMT
Poor ERP
package
selection
other

ERP implementation
challenges
Top 5 risk with ERP
implementations:
1. Expensive (can
costs 100
thousands to
million of dollars)
2. Time
consuming (can
take months to
years)
3. Great risk for
the organization
4. Transfer of
knowledge
5. Acceptance
within the
organization

• Changes in business procedures, responsibilities and workload
• As a result, the ERP implementation are times of high stress, long hours and uncertainty
• Mid level managers must
• Facilitate continual feedback from employees
• Provide honest answer to their question and help to resolve their problems
Change management:
• General education about the ERP system for everyone
• Massive amount of end user training before and during implementation
• Follow-up training after the implementation
• A training budget of 10% to 15% of the total implementation budget gives an organisation an 80%
chance of success
Extensive education and
training
• Clean-up data before cut-over
• “Near enough is no longer good enough”
• To command trust, the data in the system must be sufficiently available and accurate
• Eliminate the old systems, including all informal systems
Data clean up and data
integrity
• Following implementation, there will be an ongoing need for training and software support.
• Ongoing communication with all system users is required, as is monitoring the new system's use.
• Ongoing process of learning and adaptation that evolves over time
Implementation is viewed
as an ongoing process
Best practices of ERP implementation:

• Conclusion:
The potential benefits of a properly chosen and implemented ERP
system can be substantial.
• Inventory costs are reduced by 25 to 30% on average, with raw material costs reduced by
25%
• Lead-time for customers, production time, and production cost can be reduced
BUT the cost of implementing can be quite high and risks are great

ERP-Key market
insights
• Lists of key players :
• Oracle corporation (U.S), IBM Corporation (U.S), SAP SE
(Germany), Workday, Ins. (U.S), Microsoft corporation
(U.S), Sage group pls (U.K), Infor (U.S), Deltek (U.S), IFS
Global (Sweden), Epicor (U.S) and Others
Source: Enterprise Resource Planning [ERP] Software Market Size, 2029 (fortunebusinessinsights.com)
Market drivers:
Growing need to
improve operational
efficiency &
Streamline business
processes
Market trends:
Rising adoption of
advanced technologies

SUCCESSFUL CASE STUDIES OF ERP
IMPLEMENTATION
• Choosing the Oracle ERP Cloud solution helped
Western Digital merge three businesses.
• In 2018, Walmart announced a five-year agreement
with Microsoft for Microsoft Azure, which creates a
framework for multiple ERP systems.
• The TD Bank Group of companies also contracted
with Microsoft Azure for a cloud framework that
can integrate multiple capabilities and create more
digital innovation opportunities.

• Western Digital is a technology company with offerings in the areas of
data, data storage, data systems, and data solutions.
• A merger of Western Digital, SanDisk, and Hitachi Global Storage
Technologies (HGST) was a big challenge for the company around 2019.
• With the merger, Western Digital wanted to centralize ERP so that all
three companies could better work together.
• After final deliberations among two providers, the company went with
the Oracle ERP Cloud.
• This choice also followed with an Oracle Suite of products that included
solutions for performance management and analytics, all integrated
together.
WESTERN DIGITAL

The major benefits of the Oracle choice included integrations from the three businesses across
the following:
• Cost center management
• Information technology
• Human resource management
• Payroll processing
• Streamlined systems for forecasting business analytics and forecasts
• Workforce planning
• Comprehensive dashboards and automated reporting
• Improved customer relationship analysis
• Systems all running efficiently in the cloud for easier accessibility and document management
WESTERN DIGITAL

As of August 2022, Walmart is one of the top fifteen largest companies in the United States by market
capitalization.
Sales for the company in FY 2022 were over $570 billion.
The company operates globally with brick and mortar supercenters, discount stores, and neighborhood
markets. It owns hundreds of brands, including the well known Sam’s Club.
To successfully keep its shelves stocked it works with thousands of suppliers. Its e-commerce business is
also a large and powerful organization(behemoth), with a long list of online seller partnerships. The
complete size of Walmart’s business is one of its greatest advantages, but also challenges when it comes
to ERP.
Walmart works with many ERP providers. In 2018 however, it announced a strategic partnership for
building out a digital transformation through Microsoft Azure.
WALMART

• Benefits of the Microsoft Azure relationship include:
• Building out a cloud-based enterprise system that serves as the framework for
managing all of its resources
• The capability to plug-in existing ERP applications to the Microsoft Azure
framework
• Integration of Microsoft 365
• Broader and more efficient opportunities for e-commerce
• Broader opportunities for automated warehousing capabilities
• Use of artificial intelligence for supplier relationships
• Integration with SAP Hana and other legacy inventory management solutions
• Integration with block chain-based solutions that are evolving
WALMART

A migration to a sound cloud framework was also the driver for a relationship between TD Bank and
Microsoft for the Microsoft Azure ERP.
For the TD Bank Group, some of its biggest challenges are centered around digital storage and the
digital experience for customers.
With Microsoft Azure, the TD Bank Group will also integrate Office 365.
TD BANK GROUP
Some of the greatest benefits TD Bank will experience with its Azure relationship include:
•Enhancements in derivative pricing and risk management for TD Securities
•Integrations for its proprietary data and analytics database used in cross-bank reporting
•Integrations with artificial intelligence developments through its subsidiary Layer
•Greater opportunities for managing TD Bank customer relationships and digital experiences

Let’s Conclude
• In summary, ERP roles are critical in all types of organisations, including
manufacturing, retail, IT services, and banking.
• Choosing the best ERP for the organisation or modifying an existing one
still presents numerous challenges.
• Regardless of the costs involved in its implementation, if we see its
benefits, we will understand why it is so important in today's
competitive world.

Inroduction to ERP system core functions and challenages.pptx

More Related Content

What's hot (20)

Similar to Inroduction to ERP system core functions and challenages.pptx (20)

More from nagarajan740445 (20)

Recently uploaded (20)

Inroduction to ERP system core functions and challenages.pptx