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1 Int. To ERP
1 Int. To ERP
DEFINITION:
ERP is the technique or concepts for integrated management of business as a whole with the
objective of effective and efficient use of management resources and to improve the efficiency of
enterprise management.
ERP packages are integrated software packages that cover all business functions.
ERP systems integrate all departments and functions across a company onto a single copmputer
system that can serve the entire organization.
This real time integration and sharing of information throughout the company’s functional areas
inreases the efficiency of operations and helps managers to take better decisions.
Originally, ERP packages are targeted at the manufacturing industry and consisted mainly of
functions for generally planning and core business such as production management, sales
management etc.
Today, the power of ERP is enhanced by a host of technologies like : BI, e-business and e-
commerce, BPR, data warehousing, data mining, SCM, CRM, OLAP, PLM, GIS etc.
The basic goal of an ERP system is one central database for the data which is accessible by
various ERP facets in order to ensure the smooth flow of information across the organization.
EVOLUTION OF ERP
BENEFITS OF ERP
BENEFITS PERCENTAGE
Average Improvement 17%
Improvement in Mfg. Schedule Compliance 17%
Improvement in Complete and On-time Shipments 19%
Reduction in Administsration Costs 13%
Reduction in Operation Costs 13%
Reduction in Inventory 16%
Source: Aberdeen Group, 2009
LIMITATIONS OF ERP
REASONS
1. Affects Almost All Organization
2. Forces Competition to Change
3. Forces Business Partners to Become More Competitive
4. Improves the profits of Consulting Firms
5. Most Important Tool For BPR
6. Enforces “Best Practice Business Processes” in Organization
7. Changed the Nature of IS and IT Professionals
Depending on the organization’s size (revenue, no. of users etc.) and needs there are a number of
ERP software vendors, categorized in three segments or tiers:
MARKETPLACE DYNAMICS
SAP and Oracle are the two biggest players in ERP market.
Microsoft is not as big as these two, but the three together comprise of the Tier I ERP market.
SAP and Oracle are viable for small and mid-sized businesses while Microsoft is now viable
for mid-to-large sized businesses.
SAP
Oracle
Microsoft
Tier II Vendors
Tier III Vendors
The table and corresponding diagram show the top ERP feartures and functions that the
manufacturers requested in Tec’s survey:
DEMAND (%)
Financials & Accounting
Purchase Mgmt.
Inventory Mgmt.
APS
Sales Order Mgmt. DEMAND (%)
Discrete Mfg. Mgmt.
Maintenance Mgmt.
Mfg. Execution System
Warehouse Mgmt.
Process Manufacturing Mgmt.
0 10 20 30 40 50 60 70
Table below shows the number of firms ready to adopt ERP in 2012 and 2015: