Enterprise Resource

Planning (ERP)

ERP

General Concepts

http://www.open-source-erp-site.com

ERP – General Concepts

What is ERP? The Current Scenario Why ERP? Definition Evolution Expectations BPR & ERP BPR – The StepsE

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What is ERP?

facilitates company-wide integrated information systems, covering all functional areas

performs core Corporate activities and increases customer service

ERP is a solution, which

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The Current Scenario

Islands of Information Difficult to get timely & accurate information Heterogeneous Hardware & Software

platforms & practices Poor connectivity between different

organizational locations Sticking with obsolete technology Resist to change Lack of proven man-power to develop

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Information Islands

B

Companies before ERP Systems

New Printer Purchasing Process

1. Purchase order form for a new printer

2. Head of Department Confirmation- Faculty Head

3. Purchase order document sent to E.M.U. Account Office

4. Account Office Secretary sents the purchase order to the Responsibles

5. Purchase order- Responsible personal Confirmation

6. Purchasing department- Manager Confirmation

7. Transfer to Finance Department Secretary for processing

8. Finance Department Responsible’s Confirmation

9. Transfer to Rector’s Office

10.Rector’s Secretary- Confirmation

11.Confirmation Transfer, to Purchase Department Secretary

12.Purchase Responsible personal commends with Purchase:

Example: Before ERP Systems

Transfer to Accounting

Office

Transfer to Finance Department

Transfer to Manager

Transfer to Accounting Office

Companies after ERP Systems

Online Data Flow decreases the process time

Fast & Online Confirmation

Less Paperwork

No need for folder storage

Database Security

Less Employee needed

Easy Financial Management

Better Inventory Management

Why ERP?

For Management – to know what is happening in the company

One solution for better Management For cycle time reduction To achieve cost control & low working capital To marry latest technologies To shun the geographical gaps To satisfy the customers with high expectations To be Competitive & for survival

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ERP - Definition

“Software solution that addresses theEnterprise needs, taking a process view ofthe overall organization to meet the goals,by tightly integrating all functions andunder a common software platform”

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Evolution of ERP

1960’s - Systems Just for Inventory Control

1970’s - MRP – Material Requirement Planning (Inventory with material planning & procurement)

1980’s - MRP II – Manufacturing Resources Planning (Extended MRP to shop floor & distribution Mgnt.)

Mid 1990’s - ERP – Enterprise Resource Planning (Covering all the activities of an Enterprise)

2000 onwards – ERP II – Collaborative Commerce (Extending ERP to external business entities)E

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ERP – Expectations

Integrating all the functions

Integrating the systems running in all the locations

Transparency of information using a single data source across the organization

Software must be responsive Modular Flexible Easy to add functionalities Provide growth path

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BPR & ERP

Business Process Re-engineering [BPR] brings out thedeficiencies of the existing setup

BPR and ERP will give way to implement newsystems and the long pending improvements in theexisting systems

BPR may be time consuming but the scope can berestricted & controlled by the Management

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BPR - Steps

Step 1 Step 2 Step 3

Understand Simplify/Improve

Automate

Understand the existing systems associated with all the functionalities

Draft & frame the possibilities & ways to simplify or Improve or eliminate the processes

Implement with the help of ERP

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ERP – Options

OPTION 1 – MAKE [Using Internal resources]

Developing a custom-built ERP package, specific to therequirements of the organization, with the help of thein-house IT department

OPTION 2 - BUY

Going for Tailor-made ERP packages available in the market likeSAP, Oracle applications, Baan, PeopleSoft etc.

OPTION 3 – MAKE [using External resources]

Developing a custom-built ERP package, specific to therequirements of the organization, with the help of a software solution provider

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Building ERP solutions using Internal Sources

ERP – Building using Internal resources – The Facts Lack of adequate & qualified manpower Not driven with clear focus on expectations, time & cost Poor software project management Lack of seriousness with the Management & the IT Team High employee turnover Lot of schedule gaps during Project execution Normally project life is more Frequent change in the scope with the approval of the Management

Key Process Integration

via ERP

Key Process Integration

via ERP

Product Lifecycle

Management

Product Lifecycle

Management

Supply Chain Management

Supply Chain Management

CustomerManagement

CustomerManagement

Supplier Collaboration

Supplier Collaboration

Design Partners

Design Partners

Consumers and Channels

Consumers and Channels

Beyond ERP