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.

Manpower Money Machines Technology Customer

DATA

Input Processing Output

In
for
ma
Feedback Control tio
n

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 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.

User
Source
Data User
Processing Dissemination
Capturing
Source
User
Source User
Retrieval
Source

Storages

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 Management Information System # 3:

 Facilitates The Decision Making Processes By Furnishing Information

 This Helps Decision-maker To Select The Best Course Of Action.

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 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:

Customer

Suppliers (Europe)

(China)
Human
Resources Sales
Finance at (North
/ Payroll at
Headquarters Headquarters America
Planning Manufacturing (Japan) (Japan) )
Headquarter Product A
(China)
(Japan) Distribution Customer
(Logistics)
Shipping and (Australia)
Transportation
Foreign Trade
Planning at Manufacturing
Manufacturing Product B Human
(Indonesia) Finance at Resources
Plants (China Sales
Manufacturing / Payroll at
& Indonesia) Manufacturing (China)
Plants
(China and Plants (China
and Customer
Indonesia)
Indonesia)
Suppliers (Korea)
(India)
 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:

2000s Web Extended ERP

1990s Enhanced ERP

1980s Enterprise Resource Planning

Manufacturing Resources Planning

1970s
( MRP II )
Manufacturing Requirements
1960s
Planning ( MRP )

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Shifting Trends Of ERP:

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 ERP Modules:

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

Finance/Accounting Shop-floor Management

Mfg. Planning/Scheduling
Plant Maintenance,
Quality Management,
Material Management
Human Resources
Distribution Management
Customer Order Management
Cost Management
Inventory Management
Procurement Management
Production Control
Transportation Management
Supply Chain Management
Customer Relationship Management
E-business

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 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 Example
2. To Answer What-if Questions Asked By Management
3. To Support Decision Making

ERP’s Role:

1. Staff Reduction
2. Better Inventory Management
3. Improve Customer Responsiveness
4. Efficient Procurement
5. 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
In What ? How ?
Reliable information access Common database, consistent and accurate
data, improved reports
Avoid data and operation Avoids multiple data input to the central
redundancy 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

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 Why ERP Is The Best ? # 4
BEFORE ERP
Business Processes Proliferation of fragmented processes
with duplication of effort
Productivity Lack of openness to customers and
suppliers
Supply chain management Lack of integration
eBusiness Web based interfaces support isolated
systems and their components
Information Lack of tactical information for
effective monitoring and control
of organizational resources
Communication Lack of effective communications
with customers and suppliers
WITH ERP
Re-engineering around a business
models that conforms with “
best practices”
Direct interactions with customer
and suppliers by enhanced ERP
modules like SCM and ERP
Linkages with suppliers and
customers
Web based interfaces are front end
to integrated system
Allows cross functional access to
the same data for planning and
control.
Facilitate organizational
communications with
customers and suppliers
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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:

Supplier
Collaboration

SCM

Key Process
Integration
via ERP
Product
Lifecycle CRM
Management
Design Consumers
Partners and Channels

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 ERP : Integration With SCM:

Inventory
2000 1990 1980 1970 1960

Production Production
+ scheduling
MRP Management
Purchasing
Finance, Major
MRP + labor
MRP II Manufacturing
Resources
Coordinated
All internal Manufacturing
MRP II + resources
ERP and Service
Transactions
Internal customers Internal Enhanced
ERP + and suppliers SCM ERP/SCM

Internal External suppliers Extended Web Extended

ERP/SCM
+ and customers SCM ERP

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 ERP : Integration With CRM:

Back Office
ERP

Front Office
(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.
 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:

Management Information System

Resource

Enterprise Resource Planning

…Leads To Focusing On Creating Value And Improving

Business Processes And Better Customer Satisfaction.

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Questions? Discussion?