ERP

Enterprise Resource
Planning
ERP is a set of concepts and
techniques employed for the
integrated management of business
as a whole, from the viewpoint of
effective use of management
resources, to improve the efficiency of
an enterprise.
ERP can also be called a
Management Information System
that integrate and automate many
of the business practices
associated with the operations or
production and distribution aspect
of a company engaged in
manufacturing products or
services.
 Goals of ERP
 To improve and streamline
internal business processes,
which typically require
reengineering of current business
processes.
 Advantages of ERP
 breaks down barriers between departments
 management visibility into every area of the
enterprise
 Supply chain flow improves
 data lag-time is eliminated
 on time shipment
 improved resource utilization
Cont..
 increases flexibility
 better customer satisfaction
 reduced Quality Cost
 Components of ERP
 ERP Software
– Module based ERP system automates business activities of
functional areas within an organization.
 Business Processes
– Strategic Planning
– Management Control
– Operational Control
 ERP Users
– Employees of the organization at all levels.
 Operating Systems
– Unix
– Windows NT
– Linux
Implementation
 For functions which are not automated
do we automate them?

 For functions which already have

software do we replace it with new ERP
model or do we integrate ERP with
existing software?
 Implementation of ERP
 Project Planning
 Choose ERP Software
 Business & Operational Analysis – Gap Analysis
 Joint creation of Implementation Plan
 Business Process Reengineering
 Installation & Implementation
 Mapping of Business Requirement (Customization)
 Module configuration
Implementation of ERP
Cont…
 Data conversion from legacy
system
 Documentation
 Management Training
 End-User training
 Production / Implementation
 Post Implementation support
People Competencies
 Functional Consultants
– Domain Expertise
People who have functional expertise in
business function (Sales, HR, Production,
Quality etc.)
 Technical Consultants
People who have Technical Expertise in ERP
& other technologies.
– Programming
– Database
– Networking
Types of ERP
 Generic ERP

 Industry Specific ERP

 Custom Built / Built to Order

Modules in Generic
ERP
 Finance
 Human Resource
 Material Management
 Quality Management
 Sales & Distribution
 Manufacturing
 Logistics
 Strategic & Operational Planning
Industry Specific ERP
 Aerospace & Defense
 Automotive
 Banking
 Chemical
 Consumer Products
 Defense & Security
 Engineering, Construction & Operation
 Health Care
 Higher Education & Research
 Industrial Machinery & Components
Industry Specific ERP
Cont…
 Insurance
 Life Sciences
 Logistic Services
 Media
 Mill Products
 Mining
 Oil & Gas
 Postal Services
 Public Sector
 Railways
 Telecommunications
ERP Vendors
 SAP
 People Soft
 JD Edwards
 Oracle
 BaaN
 System Software Associates
 Ramco Marshall
 SAP
(Systems, Applications and
Products in Data Processing)

 world leader ERP Company

 Two Versions
 SAP R/2 Mainframe Version

 SAP R/3 Client-Server Version

 2/3rd Indian Market Share

 Works through High Class of Certified
Consultants
 Consultants charge a high fee
 SAP
 suited for large corporations
 R/3 can handle multiple currencies
 has the largest number of features
among all ERP software products
 Its software that runs on widest range
of hardware platforms
 SAP
 supports multiple RDBMS ( DB2 from
IBM, Oracle, Informix and Microsoft
SQL server )
 system is rigid and forces the
organizations to change their
internal processes
 needs significantly larger resources
in terms of processing power, disk
space and network speed.
SAP R/3 Modules
 Financial Accounting
 Treasury
 Controlling
 Enterprise controlling
 Investment management
 Production planning
 Material management
 Plant maintenance and service management
 Quality management
 Project system
 Sales & Distribution
 Human resource management
 People Soft
 Belongs to Oracle Application Product Line
 Has outstanding HR Model
 Works through Global Consultants & third
Party Vendors
 Had taken over JD Edward
 Support multiple hardware and software
platforms
 BaaN
 Company is driven by innovation
 products run on multiple hardware and
software platforms
 code length decreases with the new release of
their products
 exceptionally strong in Manufacturing
 software is much less complex & far easy to
master
 less expensive to implement
 permits a faster implementation
 Company taken over by SSA
Oracle
 Includes People soft & JD Edward
application products
 outstanding Manufacturing modules
 exceptionally high acceptance of its
RDMBS product
 Other ERP installations use Oracle
DBMS
 has a superior GUI user interface
 Practically every cellular phone
company in India is an Oracle client
 Ramco Marshall
 World-class product from India
 wedded to Microsoft and Intel for processor
architecture, Operating systems and DBMS
O/S, & SQL Server
 simplicity of design & reduced cost of
ownership
 do their own implementations
 inflexibility in platform choice
 Used by process industry in the South and a
few Public Sector Undertakings
ERP Implementation
Methodologies
 The Big Bang

 Modular Implementation
Process Oriented
Implementation
Cost of ERP
 Cost of Hardware
 Cost of Software
 Cost of Professional Services
(Hidden Cost)
Hidden Costs
 Training
 Integration & Testing
 Customization
 Data Conversion
 Consultants
 Why ERP Projects
Fail ?
 Lack of clearly defined objectives and
goals. A poor corporate vision.
 Absence of organization and structure.
A poor project plan.
 Lack of involvement, coordination,
communication, and support.
A poor project team.
END
Finance

 Financial Accounting
 Investment Management
 Controlling
 Treasury
 Enterprise Controlling
Financial Accounting

 General Ledger
 Accounts Receivable / Payable
 Fixed Asset Accounting
 Legal Consolidation
Investment Management

 Investment
 Planning
 Budgeting
 Controlling

 Depreciation
 Forecast
 Simulation
 Calculation
Controlling

 Overhead Cost Controlling

 Activity Based Costing
 Product Cost Accounting
 Profitability Analysis
Treasury

 Cash Management
 Treasury Management
 Market Risk Management
 Funds Management
Enterprise Controlling

 Executive Information System

 Business Planning & Budgeting
 Profit Center Accounting
Human Resource

 Personnel Management
 Organizational Management
 Payroll Accounting
 Time Management
 Personnel Development
 Material Management

 Pre Purchasing Activity

 Purchasing
 Vender Evaluation
 Inventory Management
 Invoice Verifications and Material
Inspection
 Quality Management

 Computer-Aided Quality Management

– Quality Planning
– Quality Inspection
– Quality Control
 Computer Integrated Quality
Management
Sales & Distribution

 Master Data Management

 Order Management
 Warehouse Management
 Shipping
 Billing
 Pricing
 Sale Support
 Transportation
 Foreign Trade
Big Five Consulting
houses
 Anderson consulting
 Ernst & Young
 Price Waterhouse
 Coopers & Lybrand
 KPMG and
 Delolite & Touche
 Big Five Consulting
houses
 actively engaged in ERP consulting
 the richest ERP implementation experiences
 developed their own methodologies of
implementation
 have full-fledged development centers
 have developed excellent course-ware and
training materials
 operate in the "high risk high reward" area
 charge a very high fee