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Enterprise Resource Planning

Enterprise Resource Planning

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Published by gargpriyanka
Sikkim Manipal university Assignment, MBA-4 Sem
Sikkim Manipal university Assignment, MBA-4 Sem

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Published by: gargpriyanka on Dec 18, 2010
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Master of Business Administration in Information SystemMBA- Semester IVMI0029- Enterprise Resource Planning
. What do you mean by Enterprise Resource Planning? Also discuss the advantages of ERP?
An enterprise resource planning (ERP) system is an integrated computer-basedapplication used to manage internal and external resources, including tangible assets,financial resources, materials, and human resources. Its purpose is to facilitate the flowof information between all business functions inside the boundaries of the organizationand manage the connections to outside stakeholders. Built on a centralized databaseand normally utilizing a common computing platform, ERP systems consolidate allbusiness operations into a uniform and enterprise-wide system environment.An ERP system can either reside on a centralized server or be distributed acrossmodular hardware and software units that provide "services" and communicate on alocal area network. The distributed design allows a business to assemble modules fromdifferent vendors without the need for the placement of multiple copies of complex andexpensive computer systems in areas which will not use their full capacity.The initialism ERP was first employed by research and analysis firm Gartner Group in1990[3] as an extension of MRP (material requirements planning, later manufacturingresource planning) and CIM (computer-integrated manufacturing), and whilst notsupplanting these terms, it has come to represent a larger whole. It came into usebecause the creators of MRP software started to develop software applications beyondthe manufacturing arena. However, this does not mean that ERP packages havetypically been developed from a manufacturing core. Many of the major players startedtheir development of an integrated package from other directions, such as accounting,maintenance and human resources management. ERP systems now attempt to cover allcore functions of an enterprise, regardless of the organization's business or charter.These systems can now be found in non-manufacturing businesses, non-profitorganizations and governments.To be considered as an ERP system, a software package should have the followingtraits:
An integrated system that operates in (next to) real time, without relying onperiodic batch updates.
A common database, which is accessed by all applications, preventing redundantdata and multiple data definitions.
A consistent look and feel throughout each module (sales, manufacturing,accounting etc.)
The ability to access the system without specialist integration by the InformationSystem (or IT) department.
Advantages of ERP
There are a number of powerful advantages to Enterprise Resource Planning.
It has been used to solve a number of problems that have plagued large organizations inthe past.It should first be noted that companies that fail to utilize systems such as ERP may findthemselves using various software packages that may not function well with each other.In the long run, this could make the company less efficient than it should be.There are a number of processes that a company may need to integrate together. Oneof these processes is called design engineering. When a company is in the process of designing a product, the process of actually creating it is just as important as the endresult. ERP can be useful in helping a company find the best design process. Another area where ERP can be useful is order tracking. When a company receives orders for aproduct, being able to properly track the orders can allow the company to get detailedinformation on their customers and marketing strategies. If different software packagesare being used, this data may not be consistent.Perhaps one of the most important advantages of ERP is its accounting applications. Itcan integrate the cost, profit, and revenue information of sales that are made, and it canbe presented in a granular way. Enterprise Resource Planning can also be responsiblefor altering how a product is manufactured. A dating structure can be set up which canallow the company to be informed of when their product should be updated. This isimportant, because it will allow the company to keep better track of their products, and itcan allow the products themselves to be produced with a higher level of quality. Another area where ERP can be an indispensable tool is the area of security. It can protect acompany against crimes such as embezzlement or industrial espionage.However, with all the advantages that ERP offers, there are a number of disadvantagesas well. Perhaps one of the biggest disadvantages to this technology is the cost. At thistime, only large corporations can truly take advantage of the benefits that are offered bythis technology. This leaves most small and medium sized businesses in the dark. Anumber of studies have shown that the biggest challenges companies will face whentrying to implement ERP deals with investment. The employees must be continuallytrained on how to use it, and it is also important for companies to make sure the integrityof the data is protected.
Explain SAP’s ERP Packages in detail?Ans: The SAP ERP application is an integrated enterprise resource planning (ERP)software manufactured by SAP AG that targets business software requirements of midsize and large organizations in all industries and sectors. It allows for opencommunication within and between all company functions.SAP AG was founded by five former IBM employees in 1972 who wanted to create areal-time business data system. The first name chosen for the company was notSysteme, Anwendungen und Produkte in der Datenverarbeitung (German for "Systems,Applications and Products" or the acronym SAP) but originally Systemanalyse undProgrammentwicklung (in English, "Systems analysis and program development"). Ituses the concept of modules (individual programs that can be purchased, installed, andrun separately, but that all extract data from the common database). SAP AG, thecompany that provides the enterprise resource planning solution has upgraded thepackage and launched it as SAP ERP Central Component (ECC) 6.0 in 2005. The
purpose of positioning it as ECC is to enable SAP to build and develop an environmentof other products that can function upon the foundation of the central component.SAP's ERP solution includes several modules that support key functional areas,including:
SAP ERP Financials
SAP ERP Operations
SAP R/3 through version 4.6c consisted of various applications on top of SAP Basis,SAP's set of middleware programs and tools. When SAP R/3 Enterprise was launched in2002, all applications were built on top of the SAP Web Application Server. Extensionsets were used to deliver new features and keep the core as stable as possible. TheWeb Application Server contained all the capabilities of SAP Basis.As a result of marketing changes and changes in the industry, other versions of SAPhave been released that address these changes. The first edition of mySAP ERP waslaunched in 2003 and bundled previously separate products, including SAP R/3Enterprise, SAP Strategic Enterprise Management (SEM) and extension sets. The SAPWeb Application Server was wrapped into NetWeaver, which was also introduced in2003.A complete architecture change took place with the introduction of mySAP ERP edition2004. R/3 Enterprise was replaced with the introduction of ERP Central Component(SAP ECC). The SAP Business Warehouse, SAP Strategic Enterprise Management andInternet Transaction Server were also merged into SAP ECC, allowing users to run themunder one instance. Architectural changes were also made to support an enterpriseservices architecture to transition customers to a services-oriented architecture.
SAP ERP consists of several modules including: utilities for marketing and sales, fieldservice, product design and development, production and inventory control, humanresources, finance and accounting. SAP ERP collects and combines data from theseparate modules to provide the company or organization with enterprise resourceplanning.Although there can be major benefits for customers of SAP ERP, the implementationand training costs are expensive. Many companies experience problems whenimplementing SAP ERP software, such as: failing to specify their operation objectives,absence of a strong commitment or positive approach to change, failing to deal withorganizational differences, failing to plan the change to SAP ERP properly, inadequatetesting. All these factors can mean the difference between having a successfulimplementation of SAP ERP or an unsuccessful one.If SAP ERP is implemented correctly an enterprise can go from its old calculationssystem to a fully integrated software package. Potential benefits include: efficientbusiness process, inventory reduction, and lead time reduction.
Deployment and maintenance costs

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