ERP

Enterprise Resource Planning

 A Typical Scenario
Isla n d s o f In fo rm a tio n
D ifficu lt to g e t tim e ly & a ccu ra te in fo rm a tio n
Po o r in fo rm a tio n co n n e ctivity b e tw e e n d iffe re n t
o rg a n iza tio n a lu n its e sp e cia lly lo ca tio n s
In a b ility to d rill u p a n d d o w n , la ck o f g ra n u la rity ,
la ck o f kn o w le d g e o f ro o t ca u se , la ck o f in fo rm e d
( bad ) decisions
H e te ro g e n e o u s H a rd w a re & S o ftw a re p la tfo rm s
S tickin g w ith o ld e ve n o b so le te te ch n o lo g y
R e sista n ce to ch a n g e in clu d in g E R P h o rro r sto rie s
a n d N IH
C o st o f ch a n g e , la ck o f in ve stm e n t, fu n d in g
Information Islands
Disparate System Architecture
 Characteristics of Useful
Information
• R e le va n t – reduces uncertainty, improves decision making
and prediction, confirms or corrects their expectations
• Reliable – free from error, accurately reflects the
organization
• Complete – does not omit important aspects of events it
measures or reports on
• Timely – provided when (and where) it is needed,
especially for forecasting eg the 3 day close!
• Understandable – useful and intelligible format
• Verifiable – would it withstand an audit?
• Accessible - provided when (and where) it is needed
• and TRANSPARENT
What is ERP?
What is ERP?
ERP is a software solution, which
•facilitates company-wide integrated
information sharing, covering two to all
functional areas
•addresses the Enterprise’s needs, taking a
process view of the whole organization
•Enables Enterprise-wide goal congruence
by integrating functions under a common
platform
•utilizes a single integrated database to
aid in data integrity, single holistic
views and therefore improved service
 The Origin: MRP vs. ERP
•  Manufacturing management systems have
evolved in stages from a simple means of
calculating materials requirements to the
automation of an entire enterprise
•

• Around 1980, over-frequent changes in

sales forecasts, entailing continual
readjustments in production, as well as
inflexible fixed system parameters, led
MRP (Material Requirement Planning) to
evolve into a new concept : Manufacturing
Resource Planning (or MRP2) and finally
the generic concept Enterprise Resource
A n In te g ra te d
A cco u n tin g S yste m

“ C o re ” E R P
Fu n ctio n s
The ERP Evolution
The Current Generation
 ERP II
• Coined in the early 2000s, is often used
to describe the next generation of
ERP software.
• This generation is web-based and
allows both employees and external
resources (such as suppliers and
customers) real-time access to the
system's data.
• EAS — Enterprise Application Suite is a
new name which include (almost) all
segments of business using COTS
 ERP Functionality (1)

• Manufacturing  Engineering, bills of material,

scheduling, capacity, workflow management,
quality control, cost management, manufacturing
process, manufacturing projects, manufacturing
flow
• Supply chain management  Order to cash,
inventory, order entry, purchasing, product
configurator, supply chain planning, supplier
scheduling, inspection of goods, claim processing,
commission calculation
• Financials  General ledger, cash management,
accounts payable, accounts receivable, fixed assets
• Project management  Costing, billing, time
and expense, performance units, activity
management
 ERP Functionality (2)
Human resources  Human resources, payroll,
training, time and attendance, benefits
Customer relationship management 
Sales and marketing, commissions, service, customer
contact and call center support
Data services  various "self-service"
interfaces for customers, suppliers, and/or employees
Access control management of user
privileges for various processes
ERP Advantages
 ERP Drawbacks

C o stly so ftw a re
La rg e in fra stru ctu re to im p le m e n t
D e d ica te d te a m to im p le m e n t
Tim e co n su m in g to im p le m e n t
S p e cia lize d p e o p le to m a in ta in
C u sto m iza tio n is n o t re co m m e n d e d b u t n e e d s to
b e d o n e to su it o rg a n iza tio n a l n e e d
E xte n sive u se r tra in in g
 The Supply Chain:
Control
Finance Capital Costs Profit/Loss Balance sheet

Ma Ma D is
n Re Co
S u te ria u fa
c tu
trib
ta i ns
um
pp ls u to
lie re r l er
r

Machines Operating resources Human resources

Managing Resources
 ERP: The Supply Chain

Smith Supply Co. The linking of these separate value chains

Inbound Logistics creates a larger system known as a supply
Operations chain.
Outbound Logistics
Marketing & Sales
Service Pharmaceuticals, Inc.
Inbound Logistics
Operations
Outbound Logistics Customer Pharmacy
Information technology Inbound Logistics
can facilitate Marketing & Sales
Operations
synergistic linkages Service
that improve the Outbound Logistics
performance of each Marketing & Sales
company’s value chain. Service
G Steele Case Study
G Steele Case Study
Key Benefits
Key Success Factors
Key Success Factors