Enterprise Resource

Planning
Session 1
Introduction
Faculty
Dr. Neetu Ganapathy
Neetu Ganapathy SDM IMD September 2014

Course Overview

Introduction to ERP
Business Processes
Architecture
Manufacturing Perspective
ERP Toolbox

Neetu Ganapathy SDM IMD September 2014

Course Overview Contd..

Implementation
Issues: Pre, Implementation, Post

ERP for SMEs

ERP and Related Technologies
Present and Future Trends

Neetu Ganapathy SDM IMD September 2014

Course Overview Contd..

Pedagogy
Lectures
Cases
Project
Industry Visit
Guest Lecture/Panel Discussion

Learning will be fun!

Neetu Ganapathy SDM IMD September 2014

Course Overview Contd..

Evaluation Components
Class Participation
Tests
Mid-term Exam
Project
End Term Exam

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Todays Session..

What is ERP?
Scenario: Earlier and Now
What ERP does?
Evolution
An ERP system
Why ERP?
What does it cost?
How long will it take to implement?

Neetu Ganapathy SDM IMD September 2014

Snap Test

Define ERP. (1)

Who coined the term ERP? (0.5)
BPR? (1)
EA is a subset of ERP. (T/F) (0.25)
ERP provides competitive advantage. T/F (0.5)
One open source ERP? (0.5)
ERP systems are rigid. (T/F) (0.25)
Post ERP depression? (0.5)
Technique used to speed up ERP implementation.
(0.5)

Neetu Ganapathy SDM IMD September 2014

What is ERP?
Enterprise
Resource
Planning
A concept that aims at optimizing the
usage of resources in an Enterprise via
proper planning.
Term coined by Gartner
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ERP Defined
A transactional system which provides for a
disciplined way of doing business
A Software solution that addresses the
Enterprise needs, taking a process view of the
overall organization to meet the goals, by tightly
integrating all functions under a common
software platform
A business management system that allows an
organisation to use a system of integrated
applications to manage the business
-Webopedia
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Need for an ERP

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Pre-ERP
Financial
Accounting
Production
Department

HR
Department

Inventory
Management

Logistic
Management

Quality
Department

Maintenance
Department
Sales and
Distribution

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Information Islands

Marketing
Accounting
HR

Production
Finance
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To survive..
Companies needed to ask themselves
Where we are, where we want to be and, in
order to get there, what is the best enabler or
solution?

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For this..
Integration of Manufacturing with other
functional areas like accounting,
marketing, finance, HR etc. necessary
Need to integrate the entire enterprise
Multiplant
Multilocation

ERP made this possible

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Post ERP
Financial Accounting

Production
Department

HR
Department

Inventory
Management

Logistic
Management

Quality
Department

Maintenance
Department
Sales and
Distribution

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ERP- A pictorial Depiction

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What does ERP do?

Takes us from

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What does ERP really cost?

No exact figures available as many variables
involved

Number of modules needed

Number of concurrent users
Amount of integration needed
The readiness of the company to change
Number of divisions it will serve

Plain vanilla Vs. customisation

Cost of ERP system= Cost of ERP + Cost of third
party s/w+ Cost of h/w and
s/w + Cost of implementation (consultant charges)
(1:1)
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What does ERP really cost?

Today
Costs have come down
Discounts offered as market slowed down
Cost between $750,000 and $100,000,000+
For SMEs: $150,000 to $750,000.
Vendors constantly trying to bring down costs

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How long will an ERP project

take?
Takes 3 months
to 5 years to implement
Some vendors promise short
implementation times of 6 months.
Very rarely possible though today we are
closer to achieving it
Generally very long and painful process as
Requires change in the way business is done
Requires change in the way people work

Short implementation times possible if

Company small
One small module being installed
Very few and simple processes
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