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ERP Enterprise Resource Planning

ERP Enterprise Resource Planning

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Published by imad rehman

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Published by: imad rehman on Dec 17, 2009
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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


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

Implementation of ERP

    

Data conversion from legacy system Documentation Management Training End-User training Production / Implementation Post Implementation support

People Competencies

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
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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

Industry Specific ERP Cont…
          

Insurance Life Sciences Logistic Services Media Mill Products Mining Oil & Gas Postal Services Public Sector Railways Telecommunications

ERP Vendors
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SAP People Soft JD Edwards Oracle BaaN System Software Associates Ramco Marshall

(Systems, Applications and Products in Data Processing)
 

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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

  

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
  

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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

       

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

     

Includes People soft & JD Edward application products outstanding Manufacturing modules exceptionally high acceptance of its RDMBS product Other ERP installations use Oracle DBMS 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.


    

Financial Accounting Investment Management Controlling Treasury Enterprise Controlling

Financial Accounting
   

General Ledger Accounts Receivable / Payable Fixed Asset Accounting Legal Consolidation

Investment Management

 Planning  Budgeting  Controlling

 Forecast  Simulation  Calculation

Controlling Overhead Cost Controlling Activity Based Costing Product Cost Accounting Profitability Analysis

   

   

Cash Management Treasury Management Market Risk Management Funds Management

Enterprise Controlling
  

Executive Information System Business Planning & Budgeting Profit Center Accounting

Human Resource
    

Personnel Management Organizational Management Payroll Accounting Time Management Personnel Development

Material Management
    

Pre Purchasing Activity Purchasing Vender Evaluation Inventory Management Invoice Verifications and Material Inspection

Quality Management

Computer-Aided Quality Management
– Quality Planning – Quality Inspection – Quality Control

Computer Integrated Quality Management

Sales & Distribution
        

Master Data Management Order Management Warehouse Management Shipping Billing Pricing Sale Support Transportation Foreign Trade

Big Five Consulting houses
     

Anderson consulting Ernst & Young Price Waterhouse Coopers & Lybrand KPMG and Delolite & Touche

Big Five Consulting houses
      

actively engaged in ERP consulting the richest ERP implementation experiences developed their own methodologies of implementation have full-fledged development centers have developed excellent course-ware and training materials operate in the "high risk high reward" area charge a very high fee

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