SCM502 - ERP

(Enterprise Resources Planning)

Session 3 - ERP Modules

Institute of Business Management (IoBM)

Faisal Jalal

Case Study

SCM502 Enterprise Resources Planning 2012

Whats in an ERP?

Business Processes

Best Practices to support organizational functions Client Server Architecture (presentation, Internet-enabling, application and database layer) Relational Database Management System Workflow Management

Technology

SCM502 Enterprise Resources Planning 2012

Traditional Process
Purchasing Purchase Order Data Receiving Copy of Purchase Order Receiving Document Data Vendor

Goods Invoice
Payment

Accounts Payable
Data
SCM502 Enterprise Resources Planning 2012
4

How ERPs Work in the Reengineered Process Purchasing

Goods Receiving
P.O. ERP

Vendor

Payment

Accounts Payable

Data
SCM502 Enterprise Resources Planning 2012

Purchase-to-Pay
1. Determine requirements, complete purchase requisition. ERP system may automatically generate the purchase requisition and review requests to determine if they are authorized and within budget.
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SCM502 Enterprise Resources Planning 2012

Purchase-to-Pay
2. Prepare and record purchase order. ERP system assists the buyer in identifying sources of supply, preparing RFQs to vendors, analyzing vendor quotes, comparing vendor prices, terms, and past performance.

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SCM502 Enterprise Resources Planning 2012

Purchase-to-Pay
3. Goods receipt including comparing quantity ordered to quantity received and recording in GL. If match fails, ERP notifies proper personnel to ensure timely reconciliation. ERP ensures timely availability of goods and records vendor performance data.

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SCM502 Enterprise Resources Planning 2012

Purchase-to-Pay
4. Receive vendor invoice, match with PO and receiving report; record payable. If the match fails, the ERP notifies personnel to ensure timely reconciliation of differences.

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SCM502 Enterprise Resources Planning 2012

Purchase-to-Pay
5. Prepare and record cash disbursement and update accounts in the GL. ERP system facilitates this process by using vendor and AP data to schedule payments in accordance with vendor terms and to receive discounts.
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SCM502 Enterprise Resources Planning 2012

Essence of ERP

Record day-to-day transactions of running a business and provide near real-time access to information in a consistent manner throughout the organization

Big picture
Enterprise Resource Planning Systems

Planning

Time
Transactions

Money

Material

SCM502 Enterprise Resources Planning 2012

ERP System includes

Single integrated software program. Single database. Information shared and communicated. Automates customer orders, order fulfillment, billing, shipping, etc. Tracking

SCM502 Enterprise Resources Planning 2012

Subsystems of ERP

Logistics Bill Of Materials Sales & Marketing Master Scheduling Materials Requirement Planning Capacity Requirements Planning Purchasing Shop Floor Control Accounts Payable/Receivable HR
SCM502 Enterprise Resources Planning 2012

Subsystems of ERP
Finance
-General Ledger -Accounts Receivable -Accounts Payable -Procurement -Fixed Assets -Treasury Mgmt -Cost Control -Grant Management

Human Resources
-HR/Benefits Administration -Payroll -Self-service HR

e-Business
-eProcurement - Employee Self Service - e-Recruiting/e-Hiring - e-Filing - Citizen Access - Web-enabled transactions - e-Commerce

Transaction Engine
Core software that manages transaction flow among applications and handles tasks like security and data integrity

Data Analysis
Decision support software that lets senior executives and other users analyze transaction data to track business performance

Customer Relationship Mgt Supply Chain/ Mfg Mgmt

Planning, scheduling and fulfillment applications that address all procurement requirements across the enterprise -Consistent user experience - Personalization of services - Realtime access- enterprise info

SCM502 Enterprise Resources Planning 2012

Cross-Functional Nature of the Order Management Process

Check Credit

Quote

Commit

Produce

Deliver

Bill

Collect

SCM502 Enterprise Resources Planning 2012

Cross-Functional Nature of the Order Management Process

Check Credit

Quote

Commit

Produce

Deliver

Bill

Collect

Sales & Distribution Production Planning Financial Materials Mgmt

Accounting
SCM502 Enterprise Resources Planning 2012

Cross-Functional Nature of the Order Management Process

Check Credit

Quote

Commit

Produce

Deliver

Bill

Collect

Sales & Distribution Production Planning Financial Materials Mgmt

Accounting
SCM502 Enterprise Resources Planning 2012

Major Players

SCM502 Enterprise Resources Planning 2012

SAP - The Company

Founded in 1972 in Waldorf, Germany 4th largest software supplier in the world Revenues over $10 billion in a year SAP growing over 40% a year More than 25,000 employees worldwide Over 9,000 installations at 6,000 companies with more than 2,500,000 users in over 50 countries An average of 25% of revenue invested in R&D

SCM502 Enterprise Resources Planning 2012

SAP R/3 System

Sales and Distribution Materials Management

Financial Accounting

SD MM

FI CO

Controlling

Production Planning

PP

R/3
Client / Server ABAP/4
PM
HR IS OC

AM

Assets Management

Quality Management Plant Maintenance Human Resources

QM

PS

Project System Office and Communications

Industry Solutions (e.g. OIL, etc)

SCM502 Enterprise Resources Planning 2012

PeopleSoft - The Company

Revenues over $2.5 billion in a year 2nd largest ERP supplier in the world Growing over 60% a year Over 7,000 employees worldwide 2,900 clients worldwide

SCM502 Enterprise Resources Planning 2012

PeopleSoft The Product

HRMS

Payroll, Benefits, Human Resources, Pension Administration, Time & Labor General Ledger, Payables, Receivables, Asset Management, Projects, Budgets, Expenses, Cash Management

Accounting and Control

Treasury Management Materials Management Supply Chain Planning Service Revenue Management Procurement Enterprise Performance Management Project Management

SCM502 Enterprise Resources Planning 2012

Oracle - The Company

Founded in 1977 2nd largest software supplier in the world Revenues over $12 billion in a year 41,000 employees worldwide, 16,000 U.S.

Reflects total company - not just applications business

More than 6,000 customers in 76 countries Oracles applications license revenue is growing at 18% a year; significantly less than its rivals.

SCM502 Enterprise Resources Planning 2012

Oracle - The Products

Financials

Projects

Planning (G/L, Analyzer) Analysis Consolidation Expenditure Management Billing and Cash Collection Cash Management Asset Management

Costing Billing Time and Expense Activity Management Gateway

Supply Chain

Strategic Procurement Non-production Procurement Strategic Souring Catalogue Management

Human Resources Materials Management

Inventory Purchasing

SCM502 Enterprise Resources Planning 2012

Oracle - The Products

Manufacturing

Factory & Item Definition Planning & Simulation Materials Management Production Cost Management Integrated Technologies

SCM502 Enterprise Resources Planning 2012

SCM502 Enterprise Resources Planning 2012 M0254 Enterprise Resources Planning 2004

SCM502 Enterprise Resources Planning 2012 M0254 Enterprise Resources Planning 2004

SCM502 Enterprise Resources Planning 2012 M0254 Enterprise Resources Planning 2004

SCM502 Enterprise Resources Planning 2012 M0254 Enterprise Resources Planning 2004

SCM502 Enterprise Resources Planning 2012 M0254 Enterprise Resources Planning 2004

Thank You

SCM502 Enterprise Resources Planning 2012