Can ERP Becomes An Alternative To MIS ?

Submitted by:

Swatisudha Samantaray

Roll. No. R060106013

UPES

What Makes The Business To Think:

The Challenges Of Globalization

Unprecedented Levels Of Competition.

Shifting Of Mass Production System To Mass Customization System

Deals With Multiple Countries, Multiple Currencies

Trade Barriers Are Falling

Consumers Are In Demand

Change Becomes Constant

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Attention Goes To:

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What Is Information System:

An Information System Is An Open, Purposive System That Produces Information By Using “Input-process-output” Cycle From The Available Data.

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Feedback Control

DATA

Information

Input OutputProcessing

Manpower Money Machines Technology Customer

Why Information System:

To Remain Competitive, Desired Information Is Required To The Right People At The Right Time.

Information Systems Used To Enable Information Flow Within And Between Processes Efficiently And Effectively.

Through Information System Competitive Advantage Can Be Gained Via Cost Reduction, Product Enhancement, And Customer Service Improvements.

Information Systems Are Useful Tools To Enable And Manage Business Transformation Or Change.

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Management Information System # 1:

According To Schwartz, MIS Is A System Of People, Equipment, Procedures,

Documents And Communication

That Collects, Validates, And Operates On Transformers, Stores, Retrieves And

Present Data For Use In Planning, Budgeting, Accounting, Controlling, And Other Management Process.

The MIS Emphasizes:

Organization-wide Information Decision Support Managerial Emphasis Computer Based Systems

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Management Information System # 2:

Provide A System For Collecting, Processing, Storing, Retrieving, And Transmitting Information To The Users.

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SourceData

Capturing

User

User

User

User

Source

Source

Source

Processing Dissemination

Retrieval

Storages

Management Information System # 3:

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Facilitates The Decision Making Processes By Furnishing Information This Helps Decision-maker To Select The Best Course Of Action.

Characteristics Of MIS:

Management Oriented:

Management Directed:

Integrated:

Common Data Flow:

Heavy Planning Element/ Long Term Planning:

Sub-system Concept:

Flexibility And Ease Of Use:

Need Based:

Exception Based:

Future Oriented:

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Limitations Of MIS:

MIS Cannot Replace Managerial Judgments In Decision-making.

The Quality Of Output Of An MIS Is Directly Proportional To The Quality Of Input And Processes.

In A Fast Changing And Complex Environment, MIS May Not Have Enough Flexibility To Update Itself Quickly.

MIS Takes Only Quantitative Factors Into Account.

MIS Is Less Useful In Making Non-programmed Decisions.

MIS Is Less Effective In Organizations Where Information Is Not Being Shared With Others.

MIS Is Less Effective Due To Frequent Changes In Top Management, Organizational Structure And Operational Management.

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Why Enterprise Resource Planning:

Information Systems Are Becoming More And More Complex

Due To The Stumbling Blocks: Time, Cost, Objective Data, Unstructured Process

Development Of A Vision Of Integrated Information System

Dissimilar Systems

Business Becomes Global

Incoherent Business Process

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Current Business Scenario:

Suppliers

(China)

Suppliers

(India)

Customer

(Europe)

Customer

(Australia)

Customer

(Korea)

Planning Headquarter (Japan)

Planning at Manufacturing Plants (China & Indonesia)

Manufacturing Product A (China)

Manufacturing Product B (Indonesia)

Finance at Headquarters (Japan)

Finance atManufacturing Plants (China and Indonesia)

Human Resources / Payroll atHeadquarters (Japan)

Human Resources / Payroll atManufacturing Plants (China andIndonesia)

Sales (North America)

Sales (China)

Distribution(Logistics)Shipping and TransportationForeign Trade

What Is ERP:

Serves As A Cross-functional Enterprise Backbone That Integrates & Automates Many Internal Business Processes And Information Systems Covering All Functional Areas.

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Characteristics Of ERP:

Many Distinct Business Modules Such As Financial, Manufacturing, Accounting, Distribution, Etc.

Use Centralized Common Database Management System (DBMS)

The Modules Are Integrated And Provide Seamless Data Flow Among The Modules

They Are Flexible And Offer Best Business Practices

They Require Time-consuming Tailoring And Configuration Setups For Integrating With The Company’s Business Functions

The Modules Work In Real Time With Online And Batch Processing Capabilities

They Are Internet-enabled

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Evolution Of ERP:

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2000s

1990s

1980s

1970s

1960s

Enhanced ERP

Enterprise Resource Planning

Manufacturing Resources Planning ( MRP II )

Manufacturing Requirements Planning ( MRP )

Web Extended ERP

Shifting Trends Of ERP:

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ERP Modules:

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The Number And Features Of The Modules Vary With The Package. Some Of The Most Common Modules Available In Almost All Packages Are:

Shop-floor Management Inventory Management Procurement Management Production Control Transportation Management Supply Chain Management Customer Relationship Management E-business

Finance/Accounting Mfg. Planning/Scheduling Plant Maintenance, Quality Management, Material Management Human Resources Distribution Management Customer Order Management Cost Management

Benefits Of ERP:

Gives A Company An Integrated Real-time View Of Its Core Business Processes

Helps Improve The Quality And Efficiency Of Customer Service Reductions In Transaction Processing Costs And Hardware, Software, And It Staffs

Leads To Improved Performance, Better Decision Making, Competitive Advantage

Replaces A Multiplicity Of Different Systems And Databases

Allows Replacement Of Disparate Systems E.G. Exxon Mobile Used ERP To Replace 300 Different Systems

Increases Organizational Real Time Information Flow

Process Reengineering -- Update Old Processes

Foundation For New Processes, Such As E-procurement

Lays Foundation For Electronic Commerce

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MIS Vs. ERP:

Both MIS And ERP Systems Focus On The Automation Of Business Processes, Data Transfer, And Information Sharing Across The Organization.

MIS Is An Information System Designed For Providing Information To Support Operational Control, Management Control, And Decision-making Functions In An Organization

ERP Systems Are Some Of The Most Advanced, State-of-the-art Management Information Systems In Today’s Business World.

An ERP System Integrates Information Systems And Business Processes To Enable Information Entered Once To Be Shared Throughout The Organization.

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MIS Vs. ERP:

MIS’s Role:

1. To Generate Reports-for Example2. To Answer What-if Questions Asked By Management3. To Support Decision Making

ERP’s Role:

1. Staff Reduction2. Better Inventory Management 3. Improve Customer Responsiveness 4. Efficient Procurement5. Enhanced Financial Management And Corporate Governance:6. Software Security: E.G. Seradex ERP 7. Encouraging Uniqueness 8. Changing The Working Pattern 9. Web-enable ERP

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Why ERP Is The Best ? # 1

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Why ERP Is The Best ? # 3

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In What ? How ?

Reliable information access Common database, consistent and accurate data, improved reports

Avoid data and operation redundancy

Avoids multiple data input to the central database

Delivery and cycle time reduction Minimizing retrieving and reporting delays

Cost reduction Time saving in decision making

Easy adaptation Changes in business processes easy to adapt and restructure

Improve scalability Structured and modular design

Improve maintenance Vendor supported long term contracts as a part of procurement

Global outreach Extended modules like CRM and SCM

E-commerce, e-business Collaborative culture

Why ERP Is The Best ? # 4

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BEFORE ERP WITH ERP

Business Processes Proliferation of fragmented processes with duplication of effort

Re-engineering around a business models that conforms with “ best practices”

Productivity Lack of openness to customers and suppliers

Direct interactions with customer and suppliers by enhanced ERP modules like SCM and ERP

Supply chain management Lack of integration Linkages with suppliers and customers

eBusiness Web based interfaces support isolated systems and their components

Web based interfaces are front end to integrated system

Information Lack of tactical information for effective monitoring and control of organizational resources

Allows cross functional access to the same data for planning and control.

Communication Lack of effective communications with customers and suppliers

Facilitate organizational communications with customers and suppliers

ERP :Integration With E-Procurement and E-Commerce:

Many companies with ERP use e-commerce E-commerce needs to interface with ERP

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ERP : Integration With CRM and SCM:

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Key Process Integration

via ERP

Key Process Integration

via ERP

Product Lifecycle

Management

Product Lifecycle

Management

SCMSCM

CRMCRM

Supplier Collaboration

Supplier Collaboration

Design PartnersDesign

PartnersConsumers

and Channels

Consumers and Channels

ERP : Integration With SCM:

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Inventory

Purchasing

Productionscheduling

MRP

1960 Production

Management+

MRPFinance,

laborMRP II

1970 Major

Manufacturing Resources

+

MRP IIAll internalresources

ERP

1980

Coordinated Manufacturing and Service Transactions

+

ERPInternal customers

and suppliersInternal

SCM1990 Enhanced

ERP/SCM+

InternalERP/SCM

External suppliersand customers

ExtendedSCM20

00 Web Extended ERP+

ERP : Integration With CRM:

Front-end Function Like Managing, Acquiring And Retaining Customers Are Effectively Managed By CRM. They Effectively Capture The Customer Requirements At The Front End

ERP, Integrated With All Functional Areas, Converts This Customer Requirement Into Feasible Finished Products In Time.

Back Office ERP

Front Office (CRM)

ERP And BPR:

Shift From Efficient To Effective, Passive To Active, Tactical To Strategic And Automation To Optimization, Is The Motto Of ERP.

Business Process Re-engineering [BPR] Brings Out The Deficiencies Of The Existing Setup, Solves Old Problems, Redesigns Selected Processes, etc

BPR And ERP Will Give Way To Implement New Systems And The Long Pending Improvements In The Existing Systems

Implementing An ERP System Usually Requires A Company To Perform Business Process Reengineering (BPR) Or Business Process Re-design (BPRD).

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Before Conclusion:

The ERP market is expected to grow 8 percent until 2008

The leading ERP system providers are SAP and Oracle/PeopleSoft.

SAP holds 40 percent of the $24 billion ERP market

Oracle and PeopleSoft systems hold 10 percent and 12 percent respectively

One Study Indicates that 33 % of companies said their ERP system significantly reduces personal requirement.

A study of ERP implementations reports that benefits typically start 8 months after implementation with median annual savings of $1.6 million

Conclusion:

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Management Information System

Resource

Enterprise Resource Planning

…Leads To Focusing On Creating Value And Improving Business Processes And Better Customer Satisfaction.

Questions? Discussion?