AN OVERVIEW OF ENTERPRISE RESOURCE PLANNING (ERP)

ERP : Enterprise Resource Planning system is a fully integrated business

management system covering functional areas of an enterprise like Logistics,
Production, Finance, Accounting and Human Resources. It organizes and integrates
operation processes and information flows to make optimum use of resources such
as men, material, money and machine. ERP is a global, tightly integrated closed
loop business solution package and is multifaceted.
ERP Characteristics : An ERP system is not only the integration of various
organization processes, any system has to possess few key characteristics to qualify
for a true ERP solution. The features are :
1) Flexibility :- An ERP system should be flexible to respond to the changing
needs of an enterprise. The client server technology enables ERP to run
across various database back ends through Open Database Connectivity
(ODBC).
2) Modular and Open : ERP system has to have open system architecture. This
means that any module can be interfaced or detached whenever required
without affection the other modules. It should support multiple hardware
platforms for the companies having heterogeneous collection of systems. It
must support some third party add-ons also.
3) Comprehensive :- it should be able to support variety of organizational
functions and must be suitable for a wide range of business organizations.
4) Beyond the Company :- It should not be confined to the organizational
boundaries, rather support the on-line connectivity to the other business
entities of the organization.
5) Best Business Practices :- It must have a collection of the best business
processes applicable worldwide. An ERP package imposes its own logic on a
companys strategy, culture and organization.
ERP Features :
Some of the major features of ERP are :
1)
2)
3)
4)
5)
6)
7)

Provide multi-platform, multi-facility, multi-currency etc facilities

Supports strategic and business planning activities
Has end-to-end supply chain management
Provides intelligent business tools
Provides complete integration of systems
Better project management
Automatic introduction of latest technologies like EFT (Electronic fund
transfer), EDI ( Electronic data interchange), Internet, etc.

ERP Implementation :
The steps are given follows :

1) Identifying the needs of implementing an ERP package.

2) Evaluation the As Is situation of the business i.e. to understand the strength
and weakness prevailing under the existing circumstances.
3) Deciding the would be situation for the business i.e. the changes expected
after the implementation of ERP
4) Re-engineering the business process to achieve the desired results in the
existing processes
5) Evaluating the various available ERP packages to assess suitability.
6) Finalizing of the most suitable ERP package for implementation.
7) Installing the required hardware and networks for the selected ERP package.
8) Finalizing the implementation consultants who will assist in implementation
9) Implementing the ERP package.
Benefits of Enterprise Resource Planning (ERP) :
The benefits that are achieved by implementing ERP packages are :

They make best uses of various resources.

Reduce paper documents by providing online formats for quickly entering and
retrieving information.
Improves timeliness of information by permitting posting daily instead of
monthly.
Greater accuracy of information with detailed content, better presentation,
satisfactory for the auditors.
Improved cost control.
Faster response and follow up on customers.
More efficient cash collection.
Better monitoring and quicker resolution of queries
Help to achieve competitive advantage by improving its business process.
Improves supply demand linkage with remote locations and branches in
different countries.
Improves international operations by supporting a variety of tax structures,
invoicing schemes, multiple currencies etc.
Improves information access and management throughout the enterprise.

Sample list of ERP Vendors :

Baan, Business Planning and Control System (BPCS), Mapics XA (Marcam
Corporation), MFG/Pro (QAD), Oracle Applications (Oracle), Prism (Marcam
Corporation), R/3 (SAP), System 21 (JBA)
General Model of ERP :
ERP is a global, tightly integrated closed loop business solution package and is
multifaceted. It promises one database, one application, and one user interface for
the entire enterprise, where once disparate systems ruled manufacturing,
distribution, finance and sales.

Taking information from every function it is a tool that assists employees and
mangers plan, monitor and control the entire business. A modern ERP system
enhances a manufacturers ability to accurately schedule production, fully utilize
capacity, reduce inventory, and meet promised shipping dates. ERP systems are
implemented in a three Tier Client Server Architecture; the server stores the data,
maintain its integrity and consistency and processes the requests of the user from
the client desktops. The load of data processing and application logic is divided
between the server and the client. As companied implementing ERP solutions have
multiple locations of operation and control, online data transfer has to be done
across location to facilitate these transactions, the important enabling technologies
for ERP system are workflow, workgroup, Group ware, EDI, data warehousing etc.

SUPPLY CHAIN MANAGEMENT (SCM):

In operations management as well as materials management, one topic has
recently invited attention of all business Supply Chain Management (SCM). The
difference between the conventional thinking and SCM is that SCM treats the whole
flow of information, material and services from the suppliers through factories and
stores to the final customer as a business system. These core activities require
management on day to day basis so as fulfill the demand. Supply Chain actually
represents the inter-linkage of an organization with other organization which in turn
are also having their own inter-linkage.

The Supply Chain Management is a network of facilities and distribution option that
perform the functions of procurement of raw materials, the transformation of these
raw materials into intermediate and finished goods and the distribution of these
finished goods to customers via the distribution channel that would normally include
distributors, stockiest and retailers.
The Supply Chain exists in both services and manufacturing organization although
the complexity of the chain may vary from industry to industry and firm to firm.
The major objective of SCM is to minimize uncertainty and risk associated with
supply chain. This by itself positively affects inventories, cycle time, processes, and
customer service. SCM is another name for systems optimization.
The tools for this system management are forecasting, aggregate planning,
inventory management and scheduling. It is to be appreciated that a forecast
becomes input to aggregate planning, which affects inventory planning, which
ultimately leads to schedules of workforce and equipment.
SCHEDULING

FORECASTING

SCM

AGGREGATE PLANNING

INVENTORY MANAGEMENT
Any decision taken at one stage of supply chain affects the other stages. To
illustrate, if we plan to make 2 lac scooters this week at our plant, we expect our
supplier to provide us 4 lac tyres in time at our plant so as to reach our goal. This
does not happen just as we wish. It has to be planned in terms of materials,
Customer Analysis
manpower and time.
Purchasing / Supplier Partnering

Order Fulfillment

Storage and Transport

Inventory Management and control
Integrated Supply Chain Management

Manufacturing Assembly

Demand and Lead time Management

Material management

A typical broad supply chain may incorporate the supplier of raw materials
(vendors), transporters, manufacturing plant or manufacturer, warehouse,
wholesaler, retailer and finally the customer. Each participant in the supply chain
has a supply chain of its own that seamlessly integrates into the entire network.
Traditionally, marketing, distribution, planning, manufacturing and the purchasing
organizations along the supply chain operates independently. These organizations
have their own objectives, which are often conflicting. Marketings objective of high
customer service and maximum sales revenue conflict with manufacturing and
distribution goals. Many manufacturing operations are designed to maximize
throughput and lower costs with little consideration for the impact on inventory
levels and distribution capabilities. Purchasing contracts are negotiated with very
little information beyond historical buying patterns. The result of these factors is
that there is not a single, integrated plan for the organization there are as many
plans as businesses. Clearly, there is a need for mechanism through which these
different functions can be integrated together. Supply chain management is a
strategy through which such integration can be achieved.
e-CRM (electronic Customer Relationship Management) :
first let us understand what is CRM?
Customer Relationship Management is neither a concept nor a project. Instead, a
business strategy that aims to understand, anticipate and manage the needs of an
organizations current and potential customers. It is a journey of strategic, process,
organizational and technical change whereby a company seeks to manage better its
own enterprise around customer behaviours. It entails acquiring and deploying
knowledge about ones customers and using this information across the various
touch points to balance revenue and profits with maximum customers satisfaction.
A major thrust of CRM involves segmenting customers and offering appropriate,
differentiated services for each of these levels. All customers deserve at least core
level of service, but the more strategically important customers deserve an
enhanced level of service.
CRM begins with in-depth analysis of customer behaviour and attributes to achieve
complete knowledge of the customers, their habits and desires, and their needs. It
then applies this knowledge to the formulation of marketing campaigns, strategies,
and treatment plans.

Types of CRM:
CRM allows a company to address all the types of customers it serves at different
points in their life cycle and to choose the marketing program that best fits a
customers attitude toward the company and willingness to purchase its products
and services. There are four type of CRM :
1) Win back or save : This is a process of convincing a customer to stay with the
organization at the time of discontinuing services or convincing them to rejoin
once they have left.
2) Prospecting : This is the effort to win first new customer. There are three most
important elements of prospecting are segmentation, selectivity and sources.
3) Loyalty : This is a most difficult to gain the accurate measurement. The
organization is trying to prevent the customers and uses three essentials
elements Value based segmentation, Need based segmentation and
Predictive churns.
4) Cross Sell / Up Sell : The purpose is to identify complementary offerings that a
customer would like.
The CRM Cycle :
This cycle consists of three phase :
i)

ii)

iii)

An Assessment Phase :- This phase develops a model of the behaviour of

target customers, using a combination of in-house data and external
demographic, psycho-graphic, and other data.
A Planning Phase :- During this phase, marketing decides how best to
approach the customers defined in the assessment stage by designing
marketing campaigns and strategies.
An Execution Phase :- The execution phase of the cycle is where an
organization puts all this knowledge to work, using all of the customer
touch points available.

e CRM :
e CRM uses the electronic media to integrate and simplify customer-related
business processes, drastically reducing costs of customer-facing operations while
achieving CRMs primary goal is to enhance the customer experience. It ensures
that a companys various divisions share a single view of the customer, and that the
customers get a single view of the company.
e CRM derives from CRM techniques, which leveraged call centre and direct
marketing technology to market mass-produced goods and services to small market
sub-segments. e CRM expands on this technology by using next generation
segmentation and analysis technologies, comprehensive customer interaction data,
multi channel communications and one-to-one interaction to market customized
products and services to ever more precise segments.

e CRM is essentially the adaptation of CRM in the e-Commerce environment and

helps build and sustain customer relationships using the net. It is net based
business strategy that requires development of a set of integrated software
applications to deal with all aspects of customer interactions like sales, marketing,
field support and customer service. e CRM exercise would mainly focused upon
acquiring new customers, enhancing profitability of existing customers, segment
high value customers and maximize lifetime value of profitable customers.
e CRM must address customer optimization along three dimension :
1) Acquisition :- means increasing the number of customers.
2) Expansion :- means increasing portability by encouraging customer to
purchase more products and service.
3) Retention :- means increasing the amount of time that customer stays
customers.
Implementation of e CRM :
e CRM implementation is more that system automation. The implementation
strategy should look at :

Gathering, storing, sharing / retrieving and tracking customer database

repository, analyzing this information and deciding upon the relevant course
of action.
Seamless integration of all customer communication channels with the
customer database so as to respond in customers preferred channel.
Automating and streamlining on-line customer service through installing the
necessary software and hardware.

To understand e-CRM, companies must first understand e-business in its full sense.
Further, organizations need to integrate all modes of communications web, email,
chat, video, voice to serve and support their customers in order to maximize the
total customer lifetime value to the organization. With e CRM businesses can win
customers, deliver highly targeted solutions to existing customers, and build the
type of customer loyalty that will increase sales and profitability.

Re engineering or Business Process Re engineering :

Informally re-engineering means reinvention of the company right from scratch in
view of the current environment. it is just a restart, shedding all old systems. We
have to find a better way of doing work.
Re-engineering is the fundamental re-thinking and radical redesign of business
processes to achieve dramatic improvements in critical, contemporary measures of
performance such as cost, quality, service and speed.

This dramatic change is achieved by the overhaul of organizational structures,

management systems, job descriptions, performance measurements, skill
development, training and most importantly, the use os information technology. Reengineering will impact every aspect of how the organization runs its business.
Change on this scale can cause results ranging from enviable success to complete
breakdown and failure.
A successful Re-engineering can result in dramatic performance improvements,
increase in profits, better business practices, enormous cost reductions, dramatic
improvements in productivity and so on. It can also create substantial
improvements in quality, customer service, employee satisfaction, profitability and
other business goals. The promise of re-engineering not empty, it can actually
deliver what it promises. The stories of re-engineering failures are due to the
improper implementation or other factors. Re-engineering can help a successful
company to stay on top or transform an on-the-verge-or-bank-raptly company into a
successful one.

Characteristics of Re-engineering Processes :

1) Combination of several jobs :- In a re-engineering process, some jobs are
integrated. The process compression may result into a single person handling
the task from end-to-end called case worker, or a team called case team
whose members are brought together at one location. This increase the
speed and reduces the overheads.
2) Workers decide :- there is vertical integration, and the workers decide
themselves as a part of their work, rather than expecting their superiors to do
so.
3) Natural Order Sequencing :- there is no linear sequencing in a re-engineered
process. It follows natural precedence. When a process is freed from linearity,
there are two advantages concurrent performance of several jobs, and
reduction in time between earliest time and latest time.
4) Multiple Versions :- re-engineering ends standardization observed in mass
marketing of mass production. We have several versions of same process to
adapt to the environment, but still the processes have economics of scale.
One process for all makes the matter complicated. Multiversion process
makes it simpler since each version deals with only the appropriate cases.
5) Sensible work :- work is performed in a meaningful way. Customers can be
encouraged to attend to minor repairs by counseling. Service technicians call
on only when the problem is too complex.
6) Reduced checks and controls :- in re-engineered processes, controls are
sparingly used. Stricter control in conventional organization means more time

and more cost. Control is exercised over aggregate patterns rather than on
individual cases.
7) Single contact point :- A manager acts as a link between the process and
customer. He provides all the information a customer needs.
8) Centralization Decentralization Combination :- in the re-engineered
processes, companies can avail of the advantages of the combination of
centralization and decentralization. Sales process is re-engineered by using IT
advantageously. Sales people can connect to HQ through note-books to
access information. The software exercise controls to the sales people are
immune to unreasonable prices and conditions of contract.
Responsibility of Re-engineering :
In an organization, it is the people who re-engineer. In implementing re-engineering
we come across a leader, who is a motivating force, and has enough clout and
authority. He assigns re engineering to a manger, and a re-engineering team. The
strategy of re-engineering is formulated by a steering committee. An individual who
develops re-engineering tools and techniques and co-ordinates the projects is called
re-engineering czar.
Re-engineering Process :
We have to choose one or more process which are to be re-engineered. Those
processes which have become dysfunctional, which leave a major impact on our
customers and which are feasible are chosen.

Understanding the process : - The main activities of the this phase are :

Understand why the current steps are being performed

Model the current process
Understand how technology is currently used
Understand how information is currently used
Understand the current organizational structure
Compare current process with the new objectives

Redesigning the process :- The major activities are :

Ensure the diversity of the re-engineering team

Question current operating assumptions
Brainstorm using change levers
Brainstorm using re-engineering principles
Evaluate the impact of new technologies
Consider the perspectives of stakeholders
Use customers value as the focal point.

Re-engineering Implementation :- The most challenging task is to make people

either accept or at least not oppose the re-engineering effort. People must be
educated about it. In fact, we have to sell the idea to them. First of all, they should
understand why re-engineering is needed. We should spell out what we need to
become, and how we can strive for that. A company prepares a case for action and
a vision statement to articulate these concerns.
How to succeed at Re-engineering ?
1) Re-engineering triggers off many changes while redesigning the process. We
have to cope with these.
2) Re-engineering must go simultaneously with the change in mindset.
3) We should not be satisfied by marginal results, but should aspire for big
results.
4) Some companies abandon re-engineering too early at the first sign of trouble.
5) We should not place constraints on the scope of the re-engineering effort.
6) A companys existing culture must not come in the way of re-engineering.
7) Re-engineering is not a bottom up approach. It is a top management job.
8) We should choose the right people for re-engineering.
9) We should concentrate on just a few re-engineering projects.
10)
Re-engineering may pinch a few employees.
11)
People may resist changes. But we must persist.
12)
As re-engineering is stressful, it should be accomplished in a
reasonable period of time.

WTO (World Trade Organization)

The World Trade Organisation started functioning from 1st January, 1995. It was the
result of Uruguay Round negotiations. It is successor to GATT.It has larger
membership than GATT. India is one of the founder member of WTO. It is based in
Geneva in Switzerland.
World Trade Organization (WTO), international organization established to
supervise and liberalize world trade. The WTO is the successor to the General
Agreement on Tariffs and Trade (GATT), which was created in 1947 in the
expectation that it would soon be replaced by a specialized agency of the United
Nations (UN) to be called the International Trade Organization (ITO). Although the
ITO never materialized, the GATT proved remarkably successful in liberalizing world
trade over the next five decades. By the late 1980s there were calls for a stronger
multilateral organization to monitor trade and resolve trade disputes.

IPR (Intellectual Property Rights)

Intellectual property is a legal concept referring to the protection of works created
by the human intellect. It consists of an exclusive right conferred upon the creator

or/and the owner of an intellectual work. The owner can be the creator of the work
(most usual case) or a transferee, in the event of a transfer of copyright.
This protection extends, with certain conditions, to:
1. scientific or technical inventions (patents) and technical know-how
2. trademarks for the identification of companies and products (trademarks)
3. other artistic and intellectual works developed, such as books, paintings, music,
pictures, teaching material, IT software, etc (these types of works comprise the
intellectual property / copyright in the strict sense).
Intellectual property is divided into two categories: industrial property, which
includes inventions, trademarks, industrial design, and geographical indications of
source; and copyright, which includes literary and artistic works such as novels,
films, musical works, paintings, photographs, and architectural designs. Rights
related to copyright include those of performing artists in their performances,
producers of phonograms in their recordings, producers of first fixations of films and
those of broadcasters in their radio and television programs.
The project promoters of the Education and Culture projects should normally be
more interested in copyright, taking into consideration the nature of Education and
Culture projects. Nevertheless, in the case of production, for example, of innovative
scientific applications one should not exclude the possible application of special
patent or trademark law.
What type of work can it protect?
Copyright can protect a wide range of creative activity, such as the following types
of work provided they fulfill the two conditions mentioned earlier:

Written material, including letters, lists, tables, compilations, lengthy text

extracts
Theatrical works
Computer programs (software)
CD-ROMs, DVDs, etc.
A piece of music or combinations of sounds, e.g. musical and sound works
which can be incorporated in educational material
Artistic works, such as paintings, photographs, cards, and even diagrams and
graphs
Films and videos
Radio and TV programs, cable broadcasts

Who may hold a copyright?

The author of the work himself

In most cases the copyright owner is the first person creating the work.
The employee / the employer
Certain national laws also provide that, when a work is created by an author who is
employed for the purpose of creating that work, the employer, not the author, is
deemed to be the owner of the copyright in the work. Instead, in other countries the
employee remains the owner of copyright. Special provisions might have to be
made according to the law of the country to clarify this situation (for example
when signing employment contracts).
Two or more authors
When the contributions of different authors cannot be distinguished from one
another in the final piece of work, it is considered as a "co-written work" over which
the authors own copyright jointly. Typically, each joint author can enforce the
copyright individually. However, certain national laws such as German law provide
that if parts of the work are identifiable but not suited for separate exploitation, the
creative contributors who have worked a common goal, jointly own copyright in the
work but may not assign rights in their contribution.
When an author makes a contribution which can be clearly identified, a separate
copyright may be negotiated. All the creative contributors are then considered as
author and owner of their respective contributions, unless the authors have
explicitly agreed by contract to "associate" their individual works in view of joint
exploitation. This is the case under German law for example.
Some Member States such as France and Portugal have also developed a concept of
"collaborative work" for creations in which more than one natural person have
participated and their contributions may be identified separately. Typically, the work
becomes the joint property of its authors and is to be exploited collectively.
The original right owner the creator may also transfer ownership of the right, for
instance to a publisher.
How does Copyright come into being?
Two conditions are required for the work:
1.

Tangible form

The work can be protected once it has come into existence in a tangible form. This
tangible form exists when the work is given physical expression. For instance,
copyright protection can not be conferred upon an abstract idea, or ad lib
comments made during a talk, but it can upon a speech based on brief notes.
The work in question has to be "tangible".

2. Originality
The work must also be original, to allow it benefit from copyright protection.
Originality is a tricky concept insofar as it is difficult to define, and can be
interpreted in various ways. For example, the French law accepts that a piece of
work is original provided it "carries the stamp of its' author's personality", while in
UK a criterion might be the likeness of the product to interest a prospective buyer.
The work has to be "original".