ERP

Enterprise Resource Planning

ERP is a set of concepts and techniques employed for the integrated management of business as a
whole, from the viewpoint of effective use of management resources, to improve the efficiency of an
enterprise.

ERP can also be called a Management Information System that integrate and automate many of the
business practices associated with the operations or production and distribution aspect of a company
engaged in manufacturing products or services.

Goals of ERP

 To improve and streamline internal business processes, which typically require reengineering of
current business processes.

Advantages of ERP

 breaks down barriers between departments

 management visibility into every area of the enterprise

 Supply chain flow improves

 data lag-time is eliminated

 on time shipment

 improved resource utilization

 increases flexibility

 better customer satisfaction

 reduced Quality Cost

Components of ERP

 ERP Software

– Module based ERP system automates business activities of functional areas within an
organization.

 Business Processes

– Strategic Planning

– Management Control
 – Operational Control

 ERP Users

– Employees of the organization at all levels.

 Operating Systems

– Unix

– Windows NT

– Linux

Implementation

 For functions which are not automated do we automate them?

 For functions which already have software do we replace it with new ERP model or do we
integrate ERP with existing software?

Implementation of ERP

 Project Planning

 Choose ERP Software

 Business & Operational Analysis – Gap Analysis

 Joint creation of Implementation Plan

 Business Process Reengineering

 Installation & Implementation

 Mapping of Business Requirement (Customization)

 Module configuration

 Data conversion from legacy system

 Documentation

 Management Training

 End-User training

 Production / Implementation

 Post Implementation support

 Functional Consultants

– Domain Expertise

People who have functional expertise in business function (Sales, HR, Production, Quality etc.)

 Technical Consultants

People who have Technical Expertise in ERP & other technologies.

– Programming

– Database

– Networking

Types of ERP

 Generic ERP

 Industry Specific ERP

 Custom Built / Built to Order

Modules in Generic ERP

 Finance

 Human Resource

 Material Management

 Quality Management

 Sales & Distribution

 Manufacturing

 Logistics

 Strategic & Operational Planning

Industry Specific ERP

 Aerospace & Defense

 Automotive
  Banking

 Chemical

 Consumer Products

 Defense & Security

 Engineering, Construction & Operation

 Health Care

 Higher Education & Research

 Industrial Machinery & Components

 Insurance

 Life Sciences

 Logistic Services

 Media

 Mill Products

 Mining

 Oil & Gas

 Postal Services

 Public Sector

 Railways

 Telecommunications

ERP Vendors

 SAP

 People Soft

 JD Edwards

 Oracle

 BaaN
  System Software Associates

 Ramco Marshall

SAP
(Systems, Applications and Products in Data Processing)

 world leader ERP Company

 Two Versions

 SAP R/2 Mainframe Version

 SAP R/3 Client-Server Version

 2/3rd Indian Market Share

 Works through High Class of Certified Consultants

 Consultants charge a high fee

SAP

 suited for large corporations

 R/3 can handle multiple currencies

 has the largest number of features among all ERP software products

 Its software that runs on widest range of hardware platforms

 supports multiple RDBMS ( DB2 from IBM, Oracle, Informix and Microsoft SQL server )

 system is rigid and forces the organizations to change their internal processes

 needs significantly larger resources in terms of processing power, disk space and network speed.

SAP R/3 Modules

 Financial Accounting

 Treasury

 Controlling

 Enterprise controlling

 Investment management

 Production planning
  Material management

 Plant maintenance and service management

 Quality management

 Project system

 Sales & Distribution

 Human resource management

People Soft

 Belongs to Oracle Application Product Line

 Has outstanding HR Model

 Works through Global Consultants & third Party Vendors

 Had taken over JD Edward

 Support multiple hardware and software platforms

BaaN

 Company is driven by innovation

 products run on multiple hardware and software platforms

 code length decreases with the new release of their products

 exceptionally strong in Manufacturing

 software is much less complex & far easy to master

 less expensive to implement

 permits a faster implementation

 Company taken over by SSA

Oracle

 Includes People soft & JD Edward application products

 outstanding Manufacturing modules

 exceptionally high acceptance of its RDMBS product

 has a superior GUI user interface

 Practically every cellular phone company in India is an Oracle client

Ramco Marshall

 World-class product from India

 wedded to Microsoft and Intel for processor architecture, Operating systems and DBMS O/S, &
SQL Server

 simplicity of design & reduced cost of ownership

 do their own implementations

 inflexibility in platform choice

 Used by process industry in the South and a few Public Sector Undertakings

ERP Implementation Methodologies

 The Big Bang

 Modular Implementation

Process Oriented Implementation

Cost of ERP

 Cost of Hardware

 Cost of Software

 Cost of Professional Services

(Hidden Cost)

Hidden Costs

 Training

 Integration & Testing

 Customization

 Data Conversion

 Consultants
Why ERP Projects Fail ?

 Lack of clearly defined objectives and goals. A poor corporate vision.

 Absence of organization and structure. A poor project plan.

 Lack of involvement, coordination, communication, and support. A poor project team.