What is ERP?

ERP – AN OVERVIEW
©EPPS InfoTech Pvt. Ltd.

The Market Drivers
 Global competition
 Distribution networks
 New Product Launches
 Market specialization
 Customer Demand
 Integration with Partners
Current market scenario

Industry Demands
 Aggressive cost control initiatives
 Customer acquisition cost vs
revenue
 Flexibility to adapt to the
changing business environment
 Informed decision making by the
management
 New trends in business processes

Key Challenges
 Accurate and timely information
 Applications mimicking existing
business practices
 Modifications are low and painful
 Complicated interfaces

Evolution of business
applications
 MIS : Management Information System
 IIS : Integrated Information System
 EIS : Executive Information System
 CIS : Corporate Information System
 EWS : Enterprise Wide System
So how can ERP help ?

Evolution of Planning
Systems
 MRP : Materials Requirement
Planning
 MRP : Manufacturing Resource
Planning
 ERP : Enterprise Resource Planning

ERP is a software solution that
addresses the enterprise needs
taking the process view of an
organization to meet the organizational
goals tightly integrating all
functions of an enterprise.
Definition of ERP

ERP – Enterprise
Resource Planning
 ERP facilitates company wide
integration of information systems
covering all functional areas
 ERP performs core corporate
activities and improves customer
service augmenting the corporate
image
 ERP integrates
 Database
 Applications
 Interfaces
 Tools
 BPR

IT bridges the
Information Gap
Manufacturing
Units
Customers
Suppliers
Regional
Operations
Set Ups
Corporate
Office

Why ERP ?
 Complete integration of systems across
the departments in a company as well
as across the enterprise as a whole
 Only solution for better project
management
 Better customer service
 Automatic introduction of latest
technologies
 Expertise database

ERP – the drivers
 Business
 Customer satisfaction
 Business development – new areas,
products, services
 Ability to face competition
 Efficient processes required to push
the company to top gear
 IT
 Present software does not meet
business needs
 Legacy systems difficult to maintain
 Obsolete hardware/software difficult
to maintain

Problems tackled by
ERP systems
 Material shortages
 Productivity Enhancements
 Customer Service
 Cash Management
 Inventory Problems
 Quality Problems

Definition of Business
Intelligence
Any tools enabling people to make
better decisions and thus improve
their business processes
Examples
 Decision support systems (DSS)
 Executive Information systems (EIS)
 Reporting
 Data Mining
 Early Warning Systems (robots)
Understanding ERP

Core subsystems of
ERP
 Sales and marketing
 Master scheduling
 Materials requirement planning
 Capacity requirement planning
 Bill of materials /purchasing
 Shop floor control
 Accounts payable/receivable
 Logistics

Manufacturing
 Local Purchasing
 Invoice Verification
 Inventory management
 Internal sales, shipping & billing
 Profit/loss
 Capacity Utilization
Headquarters
Information Systems:
 Inventory
 Purchasing
 Sales
 Budget
 Cash Collection
Marketing/Sales
 Sales, shipping and billing
 Purchasing of trading goods
 Inventory management
 Customer Service
Integration of Information Systems

Enabling Best Business Practices
THE CUSTOMER
SUPPLIER’S REFERENCE MODEL
New business
concepts
BUSINESS
ENGINEERING
WORKBENCH
BEST BUSINESS PRACTICES
New
Technologies
CUSTOMER
REQUIREMENTS

Changes in Customer Information
Customer Representative
Credit Manager
Product Manager
Sales Manager
Client
Places New Order
Launch
Workflow
Change Customer
Master Data
Schedule
Customer Visit
Prepare
Production
Increase Credit
Limit

Technology Update and Strategy
Inventory
Customer
Order Mgmt.
Manufacturing
Managing within the
enterprise
Executing within the
enterprise
Interfaces/APIs
between competing
products
Interfaces/APIs to
complimentary
external products
Special Applications
Plant
Mainte
nance
Shop
floor
Control
Enterprise
Accounting
System
Bank
System
Outside the Enterprise
External Systems

Reference Model Tailored Customer Satisfaction
Function Hierarchy
Customer Specific Function Hierarchy
Customer
Specific
IMG
BOM BPM Training Documentation
Customer specific
menu
Customizing
Simplify/Preset
Organizational Hierarchy
Runtime System

The Integrated Supply Chain
Procurement
Market
Purchasing Production Sales
Sales
Market
Finance Capital Costs Profit/Loss Balance Sheet
Machines
Operating
Resources
Human
Resources
Managing Resources
Control

Process Automation & Lead Time Reduction
EDI
Sales order
entry
Delivery Billing EDI
EDI Entry Blocked Limit Exceeded EDI note Scan log Loading List
Workflow for exception handling, trigger for mail, transactions, EDI
ATP
Pricing
Credit
Limit
Allocation
Picking
Transport
Adaptable standard function

Re-engineering steps
 Study the current system and
processes
 Design and develop new systems
 Define process, organization structure
and procedures
 Develop/Customize the software
 Train people
 Implement new system
How do we go ahead ?

Re-engineering
without ERP
 Advantages
 Functionality and solutions may not undergo
changes
 Can be completed within timeframe
 Cost will be within control
 Level of integration is moderate
 Impact on organization will be moderate
 Disadvantages
 Stability of the system is known only in the
long term
 Long term process change are not addressed
 Best business practices may not be in practice
 May not achieve corporate wide systems
integration
 New technologies have to be studies yourself

ERP and BPR
 In depth Business Process Re-engineering
(BPR)study to be done before taking up ERP
 BPR brings out deficiencies of the existing
system
 BPR attempts to maximize productivity
through re-structuring and re-organizing the
human resources as well as the divisions and
departments in the organization

If it is a big change,
don’t do it !
If the modifications are small and really
important to the business, you may go
ahead to customize and implement.
Else think of alternatives.

The Integrated Supply Chain
ERP Application
Objects
Automatic Functions
BPR
Vision/Best Practices
Process Re-Design
Workflow Execution
Business Procedures
Task management
Workflow Management
Planning/Scheduling
Monitoring
Dynamic
Enterprise
Modeling
A Model Design

The USA Principle
● Understand ● Simplify ● Automate
UNDERSTAND
existing practices
Methods
SIMPLIFY
processes by
eliminating waste
Methods
AUTOMATE the process
Methods
• Diagramming
• Storyboarding
• Brainstorming
• Eliminating
• Combining
• Rearranging
• EDI
• ERP

How do we start
 Ensure total management buy-in
 Ensure adequate fund allocation
 Identify the Core Team
 Project Manager
 Analysts
 Functional Specialists
 Evaluate and select ERP package
 Evaluate the Implementation Partner
 Jointly make an implementation plan
 Present plan to management committee for
sanctions
 Present plan to employee groups for feedback

ERP selection
 Are all the functional aspects of the
business are duly covered ?
 Are all the business functions and
processes are fully integrated ?
 Are all the latest IT trends are covered >
 Does the vendor has customizing and
implementing capabilities ?
 Check your budgets and calculate ROI

ERP Implementation
 Commitment from the Management
 Form a task force with personnel
from all functional areas
 Take care of hardware requirements
 Step by step rather than big bang
introduction
 Be patient. ERP implementation takes
time

ERP Involves
 Project Planning
 Business and Operational Analysis, including gap analysis.
 Business Process Re-engineering (BPR)
 Installation and configuration
 Project team training
 Business Requirements mapping to software
 Module configuration
 System modifications and interfaces
 Data Conversion
 Custom Documentation
 End User Training
 Conference room pilot
 Acceptance testing
 Production
 Post-Implementation Audit/Support

Implementation Approach
PHASE TASKS DELIVERABLES
Detailed Discussions
Project Initialization Accepted norms and conditions
Evaluation of current processes, business practices, requirements Project organization chart
Set up project organization Identify work teams
Design and
Customization
Map the organization Organization structure
Map business processes Design specification
Define functions and processes Process flow diagrams
ERP s/w configuration Function Model
Build ERP system modifications Configuration recording
Systems modification
Implementation/
Prepare to Go Live
Create Go Live plan and documentation Testing environment report
Integrate Applications Customization test report
Test the ERP customization Implementation report
Train users
Production / Go Live
Run trial production Reconciliation reports
Maintain systems Conversion Plan execution

 Ease of use
 General purpose
 Readymade solution for most of the problems
 Only customization required
 Integration of all functions already established
 ROI earlier than software developed in house
 Dependency on human resources eliminated
 Easy enterprise wide information sharing
 Suppliers and Customer can be online in terms of
communication
 Knowledge transfer between industries leads to
innovation
 Automatic adaptation to new technologies
Advantages of ERP

Zero Downtime
 Support global customers with worldwide operations
 Move towards 24 x7 availability
 Co-operate with hardware and database vendors
 Incorporate leading edge technologies
 MPP systems
 Cluster
 Mirrored disks
 Fault tolerant database systems
 Reduce planned downtime
 Hardware configuration
 System software upgrade
 Database reorganization
 Application migration

Make or Buy ?
In House Development ERP Package
Project Development takes time Readymade Projects
Needs only customization
Documentation is difficult Documentation is part of the system
Maintenance depends on individuals The ERP vendor takes care of this
EDI implementation modifications to be taken care of EDI compatible, Universally accepted.
Enterprise implementation is difficult as each unit
follows different s/w options
The package itself is designed as an Enterprise
Package
Latest developments to be studied before
implementation
Constant updates on technology and processes
assured

• Reduced Overheads and Inventory
• Timely responsiveness
• Market share and image enhancement
• Faster design to manufacturability
• Keep up with technology changes
• Only way for integrated systems for a
client with multiple locations
ERP helps you !
Summary

What is ERP?

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