ERP Concepts

Prepared by:
Lakhya Pratim Baruah
 Do we need ERP?

 Companies of all sizes can benefit from an ERP

implementation. However, the companies that have most
critical business procedures fragmented and broken are
much benefited.
 ERP helps creating a business process management

mindset, allowing them to define best practices, formalize

activities, and streamline cross-departmental functions.
 ERP systems consolidate and centralize all back-office

information in a single system eliminating lack of integration

across departmental applications.

ERP Concepts
How ERP improves business performance?

 People in different department can access the same

information and even they can update it. E.g. A customer’s
order entered in to ERP can be viewed by other
departments like Finance, Logistics etc. thereby making the
processing of the order faster and without any errors.
 Effective and trained customer service representatives,
warehouse staffs, etc. are required to make the ERP
program beneficial for the company that implements it.

contd..
ERP Concepts
There are five major reasons why companies undertake
ERP, they are:
1) Integrate financial information – Different business
units in an organization may have their own set of revenue
numbers, ERP creates a single version.
2) Integrate customer order information – Orders can be
tracked easily as the information is stored in one software
system rather than scattered among different systems that
can’t communicate with each other.
3) Standardize & speed up manufacturing process –
ERP systems come with standard methods for automating
some steps in the manufacturing process. These saves
time, increase productivity and reduce head count. Using a
standard method also will help in quick mergers and
acquisitions.
contd..
ERP Concepts
4) Reduce Inventory – ERP helps the manufacturing
process flow more smoothly, and it improves visibility of the
order fulfillment process. That can lead to reduced stock
holding at warehouses, shipping docks etc. and helps
making a better delivery plan to the customers.
5) Standardize HR information – ERP unifies HR
processes like tracking employees’ time, benefits and
services etc. among different business units in a company.

To help industry-specific problems and customization

needs, ERP vendors have recently begun to offer specially
tailored applications to take care of each vertical segment’s
needs. However, customization is still required to fulfill the
customer requirements.

ERP Concepts
 ERP Failures

There are four components of an ERP system –

a) ERP Software
b) Business Processes that ERP software supports
c) Users of ERP systems
d) Hardware and Operating Systems that run ERP
applications.

Failure in any one of these four components can lead to

failure of an ERP Project.

ERP Concepts
Thank You

ERP Concepts