Enterprise Resource Planning

INTRODUCTION

Complexities of business environment The concept of building applications which are fully integrated. Automates the routine functions of the company. Consolidate their data and information flow into one system or database

ERP DEFINED

Enterprise resource planning software is defined as integrated software that unites all data and processes of an organization into a single unified system.

Business Problems

Fragmentation of information/No single repository of data Too many processes and associated systems No real integration between Management Information Systems (MIS) Poor decision-making: wrong information delivered Poor financial accounting providing inaccurate and untimely information

WHY ERP?

Integrate financial information Integration of customer order information Standardize and speed up manufacturing processes Reduce inventory Standardize HR information

MODULES

Accounting management Financial management Manufacturing management Production management Transportation management Sales & distribution management Human resources management Supply chain management Customer relationship management E-Business

ERP GIANTS

SAP AGFlagship Products R/3, mySAP.COM Oracle CorporationFlagship Product Oracle Applications PeopleSoft Inc.Flagship Product PeopleSoft8 The Baan CompanyFlagship Product BaanERP J.D. Edwards & Co.Flagship Product OneWorld

ERP Life Cycle: Implementation, Operation and Maintenance

Implementation
1.

Installation

vendors should have supplied requirements specifying the computing resources required to run the ERP system like Operating system updates, increased networking capacity, or backup systems updates tables with settings and entries specific to the customers business, Called configuration tables (configuration tables tables enable a company to tailor a particular aspect of the system to the way it chooses to do business ).

2.

Configuration

3. Customization

project team must decide whether to implement a standard, vanilla solution (uses only the default options ) or to customize their ERP system to support a business process that may be unique requires programming, which must be performed by a programmer/developer confirm the software can meet specified requirements, Companies can use conference room pilot (CRP) sessions where conference rooms are designated as temporary locations to support development and testing, and employees can execute transactions with the proposed system configurations.

4. Testing

5. Change Management

Unfreezing, transitioning, and refreezing. The unfreeze step gets employees from unready to change to being ready to take the first step towards change, the transition step keeps the change moving through incremental steps, and the refreeze step establishes roots so that the new point stays permanent and employees do not resort back to old methods or systems ERP system may exchange data with other client server systems so interfaces must have the ability to handle complex data sources and data types Able to interface with external business partners through electronic data interchange and electronic funds transfer protocols and through web.

6. Interfacing with Other Systems

7. Training

Training expenses are high because employees almost invariably have to learn a new set of processes, not just a new software interface

8. Consultants

consultants experts can assist the project team with various activities including developing a business case, package selection, process documentation, change management, training, project management and functional knowledge As outsiders, their unbiased recommendations can be invaluable in an ERP implementation

Operation and Maintenance

Post go-live, companies enter the operation and maintenance stage, which starts with a period of stabilization. time period for stabilization is normally between three and nine months ERP maintenance activities include Preventive maintenance Emergency maintenance Software updates

ERP Integration

One of the most critical steps in the ERP implementation is the creation of Integrated Data Model. A big advantage of having an ERP system is that all the employees from different departments get access to the data through the Integrated data. The company uses this integrated data for its analysis and decision making.

Goal of Data Integration ERP

Companies always try to identify ways of becoming more: Efficient Cutting costs Better aligning with customer needs and Providing for faster response.

A large source of problems for most businesses is the huge data stored in multiple systems.

Data integration ERP addresses these concerns by:

reducing the amount of manual data entry that has to take place reducing the possibility for data entry errors providing nearly immediate access to data to anyone in the organization.

The Ideal ERP System

An ideal ERP system is when a single database is utilised and contains all data for various software modules. These software modules can include: Manufacturing Financials Human Resources Supply Chain Management Projects

Customer Relationship Management Data Warehouse

Advantages of ERP Systems

A totally integrated system The ability to streamline different processes and workflows The ability to easily share data across various departments in an organization Improved efficiency and productivity levels Better tracking and forecasting

Improved customer service Comprehensive enterprise view (no "islands of information"). Availability of Realtime information Protection of sensitive data by consolidating multiple security systems into a single structure.

Disadvantages of ERP Systems

Customization is problematic. Reengineering business processes to fit the ERP system may damage competitiveness and/or divert focus from other critical activities. Costly affair High switching costs increase vendor negotiating power

Huge support, maintenance and upgrade expenses. Overcoming resistance to sharing sensitive information between departments can divert management attention. Integration of truly independent businesses can create unnecessary dependencies. Extensive training requirements take resources from daily operations.