Introduction to

ERP
 What Is ERP?
➢ Is a business management solution designed to help companies
manage different key components of their business, including
accounting, customer relationship management (CRM) and
procurement.
➢ The main purpose of an ERP solution is to bring all facets of an
operation into a single, centralized database and to streamline
processes through a user-friendly application.
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 What Is ERP? Contd..
➢ When implemented correctly, ERP will improve workflow, automate
business processes, reduce redundancies and give everyone in the
organization access to data that is accurate, current and complete.
➢ However, for chemical and process manufacturers, it’s important to
choose a system designed to meet the industry’s specific needs.
➢ Many systems do not come with out-of-the-box manufacturing features,
and adding these as custom modules later on can be costly and time-
consuming.
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 What Is ERP? Contd..
It serves as a Cross-functional Enterprise Backbone that Integrates
and Automates many Internal Business Process and Information
Systems covering all functional areas.

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 The Ideal ERP System
� An ideal ERP system is when a single database is utilized and contains all data
for various software modules. These software modules can include:
� 1. Manufacturing
� 2. Financials
� 3. Human Resources
� 4. Supply Chain Management
� 5. Projects
� 6. Customer Relationship Management
� 7. Data Warehouse
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 Implementation of an ERP System
➢ Takes lots of planning, consulting and in most cases 3 months to 1 year +.
➢ Important traits :ownership of the project.
➢ Many changes take place and its broad effect on almost every individual in
the organization,
➢ Organizations use ERP vendors or consulting companies to implement
their customized ERP system.
➢ Three types of professional services that are provided when implementing
an ERP system, they are Consulting, Customization and Support.
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Implementation of an ERP System contd..

➢ Consulting Services: are responsible for the initial stages of ERP

implementation, they help an organization go live with their new system.
Customization Services: work by extending the use of the new ERP system or
changing its use by creating customized interfaces and/or underlying
application code.
➢ Support Services: Support services include both support and maintenance of
ERP systems. For instance, trouble shooting and assistance with ERP issues.

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Evolution of ERP

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 Evolution of ERP contd..
� MRP
➢ Handled the planning of product or part requirements according to the production schedule.
➢ Taking product schedule as input
➢ Generating works & purchase orders as output

➢ Questions to answers:

➢ What material is needed?

➢ When & how purchased?

➢ How to maximize efficiency of assets? Etc…

➢ Mainly focuses on controlling the level of materials required in the production process.
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 Evolution of ERP contd..
� MRP-II
➢ Arose because MRP needed a set of business processes surrounding it to make it effective.
➢ MRP deals with manufacturing process.
➢ MRP-II includes the managing the functional operations such as coordination of different
departments:

➢ Manufacturing

➢ Finance

➢ Human Relations

➢ Production etc…
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 Evolution of ERP contd..
➢ Based on the technological foundations of MRP and MRPII, ERP systems integrate
business processes including manufacturing, distribution, accounting, financial,
human resource management, project management, inventory management, service
and maintenance, and transportation, providing accessibility, visibility and
consistency across the enterprise.
➢ During the 1990s ERP vendors added more modules and functions as “add-ons” to the
core modules giving birth to the “extended ERPs.” These ERP extensions include
advanced planning and scheduling (APS), e-business solutions such as customer
relationship management (CRM)and supply chain management (SCM).
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 Benefits of ERP
➢ Single, unified source of data
➢ Improved efficiency
➢ Business integration
➢ Better decision making
➢ Quick response time to customers
➢ Business integration
➢ Analysis and planning capabilities
➢ Technology support 12
 Conceptual model of ERP
ERP defines the five measures that govern business policies:

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 Conceptual model of ERP contd..
Process-based flat organization:
➢ Flat organizations have a structure with few levels of middle management between leadership
and employees—or, in some cases, no middle management at all.
➢ Small organizations and startups often have flat structures because they have fewer
employees and less of a need for hierarchical management.
Assemble-to-order or Make-to-order philosophy:
➢ The idea is to build an inventory that matches expected or anticipated consumer demand.
➢ This method would consist of setting a production level, building up inventory, and then
attempting to sell as much assembled product as possible.
➢ Assemble-to-order strategy allows a product or service to be made to specific order, where a
large number of products can be assembled in various forms from common components. 14
 Conceptual model of ERP contd..
Empowered employees:
➢ Hitting a wall is one of the worst feelings in the world, especially at work.
➢ Employees can tell when they have the potential to do more but lack the authority or
resources to make it happenー or a voice to ask for them.
➢ Working in this state is extremely frustrating, and it leads to demoralization, reduced
productivity, and disengagement.
➢ Employee empowerment refers to the manner in which companies provide their employees
with anything and everything they need to succeed.

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 The Structure of ERP
➢ ERP considers them to be part of the interlinked processes that make up total business and
financial impact.
➢ They store data, process them, and present them inappropriately whenever requested by the
user.
➢ The only problem is that there is no link between the application system being used by
different departments.
➢ An ERP system also does the same thing but in a different manner. There are a hundred such
data tables that store data generated as a result of the diverse deal, but they are not confined
to any departmental or functional boundaries.
➢ These are rather integrated for speedy and precise results required by multiple users, for
multiple purposes, for multiple sites, and at multiple times. 16
ERP Modules & Their Features

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 ERP software tools
➢ 1. Salesforce.com
➢ 2. Microsoft Dynamics
➢ 3. Sage
➢ 4. PolyPM
➢ 5. E2 Shop System
➢ 6. Intacct
➢ 7. Entree
➢ 8. Netsuite
➢ 9. SAP
➢ 10. Oracle JD Edwards
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 ERP Packages

➢ Many companies develop and implement various ERP packages according

to their budget and requirements to help them meet their business needs
and run their business efficiently.
➢ The following link takes you to a page from Wikipedia where you can find
a list of almost all the ERP packages designed worldwide.
➢ http://en.wikipedia.org/wiki/List_of_ERP_software_packages

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 Review questions

• Define ERP and its primary purpose.

• List the key components of the conceptual model of ERP
• Recall the historical origins and evolution of ERP
• Name four common ERP packages available in the market today
• Identify the structure of an ERP system and its main modules
• Explain why organizations need ERP systems
• List down some myths about ERP
• Describe the functions of ERP and how they contribute to organizational efficiency
• Summarize the advantages and disadvantages of implementing an ERP system
• Discuss the need for a conceptual model in the design of an ERP system
• Illustrate with examples how ERP enhances business processes within an
organization

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Review questions

• Illustrate with examples how ERP enhances business processes within an organization
• Apply the conceptual model of ERP to a specific industry or business sector
• Analyze a case study and propose how an ERP system could address the organization's challenges
• Demonstrate how ERP tools can be used to streamline supply chain management
• Evaluate the impact of ERP implementation on organizational workflows
• Analyze the functions of ERP in improving decision-making processes
• Propose improvements to the current conceptual model of ERP based on emerging trends
• Formulate criteria for selecting an appropriate ERP package for a particular organization
• Develop a set of guidelines for training employees during the ERP implementation process
• Construct a framework for assessing the long-term success of an ERP system within an organization
• Examine the evolution of ERP and its adaptation to technological advancements

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