You are on page 1of 5

Enterprise Resource Planning

ERP [Enterprise Resource Planning] ERP is defines as an integrated software package which integrate all the department of an organization. Several department of an organization are marketing, sales, finance, production etc. Since an ERP package integrates these entire departments, thus the performance of an organization will be improved. It is used to manage the important part of business including product planning, purchasing, maintaining inventories, customer service etc. Every department has its own computer system optimized for their particular work but an ERP system combines them all together into a single computer through integrated system approach. In short ERP system provides a single database where business transaction are recorded, processed, monitored and reported. ERP system does not replace the computer of a particular department rather it integrates all the department of an organization into a single computer and provides a flexible database. Benefits of an ERP System or reasons for growth of ERP 

          

Effective utilization of resources Improvement in business performance Reduction of inventory due to JIT approach Integration of information i.e. integration of all the department of an organization. Sharing of common data and information Global Adaptation Improvement in the quality of the product at the same price ERP targeted all types of business organization whether large business or small business organization Lowers the total cost in supply chain management through JIT approach. Eliminate limitation in legacy system i.e. traditional system Order fulfillment improvement Improvement in customer service.

Evaluation of ERP Inventory control or Re-order point (1960): In 1960¶s most of the ERP system was concentrate on the inventory control ability also called re-order point system. Historical data were used to forecast future inventory demand. When an item falls below the predetermined level additional inventory is ordered. Material requirement planning (1970): In 1970¶s this system was introduced and it focused on demand based approach for planning and manufacturing of product and ordering inventory. Manufacturing resource planning (1980): In 1980¶s this approach was introduced. It was used for adding tool for sales promotion, customer satisfaction, customer order processing, production plan and focus on quality and reducing overhead cost and detailed reporting. Manufacturing resource planning-II with manufacturing executive system (MES) (1990): In 1990 this system was introduced. It provides ability to adapt production schedules to meet customer needs. Main

Implementation phase and steps of implementation Implementation includes addressing and configuration as it involves the migration the data from old system to new system. ERP in late 1990 Hidden Cost of ERP System:       Training expenses Customization: Core of ERP system is actual customization of ERP system itself. Customization has to take the following parameters:  End user requirement  Vision of the top management  Technical requirements of the products The higher the degree of customization lower will be the benefit of ERP system because packaged software purchased and installed mainly to refine existing business process and to improve overall performance of the organization. Integration and testing Replacing the staff Implementation team can never stop Wait for ROI Integrated System Approach ERP package integrate the different department of an organization with the help of integrated system approach. It is a fundamental rethinking of business process to improve the quality and output of the product or service. The process is re-engineered in such a manner that it will:  Reduce the cycle time  There is no unnecessary to and fro of information In customizing team select a commercial ERP package and customize it according to their unique requirements. Designing Phase: The fundamental decision in the designing phase is whether re-engineering the business process or customize the ERP package. Integrated system approach requires successful implementation of re-engineering process for better result of an ERP system. implementing reports and testing of package. Many . order processing. Or we can say that higher the customization will not give the full benefits of ERP system. Business re-engineering revolves around the IT and continues change. building interface. When the business process is re-engineered then team select commercial ERP package from the shelf and install it.focused was on ability and adopt new products and services to meet customer needs. However poor customization is one of the reasons of the failure of ERP system while reengineering of the business process will give the full benefits of the ERP system.

 Post implementation: It generally involves queries from user and minor changes can be possible in the formats. cost. service etc. ERP & Related Technology BPR: BPR stand for Business Process Re-engineering.  Parallel run: Under this business transaction are carried on both new system as well as old system and the implementation team take care of any problem or errors which comes to the light of parallel run.  User documentation: It is different from general documentation. It can be define as a management approach aiming at improvement by means of elevating efficiency and effectiveness of process that exits within and across the organization. getting to know the system. Data management: Will ERP support centralized data management or local data management. It includes how to carry out transaction. facilitating newly re-engineering process.companies take the help of expert from software supplier to assist implementation. Whether it is centralized responsibility or local responsibility. ERP system helps in integrating various business processes with the help of modern development in IT and with a good ERP system an organization will be capability of greater achievement in improvement in cost. One of the main tools for making this change is IT.  Building interfaces to other system like office system. IT and BPR goes together and merger of these two concepts is known as business engineering. The main requirement of BPR decentralize decision making to decision maker to be responsive to customer needs and also use of IT. trying sample transaction in the entire department. . It is a radical transition that a company must make to keep pace with today¶s ever changing global market and to achieve dramatic improvement in critic contemporary measures of performance such as quality. Features that are to be considered for configuring ERP system: Data ownership: It includes that.  User training: Training of the user can be started at the tine of test run and user of different department are to be trained in there respective areas. The unwritten rule of implementation is synchronizing the existing company package with ERP package rather than changing the source code and customizing the ERP system to suit the company. Distribution of procedures: It includes that which is to be centralized. Its main focus is on better business processes. It includes: logging in and out. and service. which will be responsible for data integrity. Steps in implementation of an ERP package  Establishing securities  Migrating the data from old system to new system and ensure that data to be migrated is accurate and authentic. quality.  System monitoring and fine tuning: IT peoples monitors system closely to see performance aspects so that end user can get the full benefits of ERP system.

fast analysis of shared multidimensional information. timely and relevant to user. OLAP can be define in five words i. The primary concept of data warehouse is that data stored for business analysis can be accessed most effectively by separating it from the data in operational system.Principles of BPR:     It assumes that current process is irrelevant and does not work. Once the data is imported into Data warehouse it becomes non-volatile i.e. According to business intelligence ltd. Data Warehouse: Since operational data can¶t be kept in the database of ERP system because as time passes volume of data will increase and this will affect the performance of ERP system. Analysis: IT means that system can cope with any business logic and statistical analysis that is relevant for application and user. To break away from outdated rules. A well implemented data warehouse is key for understanding business decisions so care must be . Capture information once and at source. Fast: fast mans that system is targeted to deliver most fast response to user within a few seconds. Elements of BPR:       Business Process Integration of business process Technology to redesign business process Cross functional coordination Timing improvement process continuously Complement market driven strategies designed to provide a competitive edge OLAP: OLAP stands for Online Analytical Processing. However once the operational use of data is over it should be removed from operational database. If operational data is kept in database then it will create a lot of problem by affecting the performance of ERP system. Multidimensional: It means that system must provide multidimensional conceptual view of data.e. µUse is over¶ does not mean that archived data is useless rather it is one of the most valuable resources of organization. Linking of parallel activities. Thus Data warehouse provides the analytical tools. Information: It means that data is refined i. In other words it can be define as copy of business transaction data specially structured for query and analysis. and other departments. no modification can be made afterward once data has been imported in data warehouse. marketing. system is prevent from unauthorized person and competitors. Shared: It means that system implements all security requirements for confidentiality i. financial reporting. So it is better to archive operational data once its use is over.e. finance. profitability analysis budgeting and planning and many others. thus need arise to save this data. Data warehouse is a blending of technologies including multidimensional and relational databases because it is integrated data from different sources and is transformed into a single data format which make it possible to analyze data in a consistent way. data is accurate. OLAP can be used in variety of business area including sales.e. It combines data from sales. marketing.

Today. More cost effective decision making. Enhanced customer service by maintaining better customer relationship. novel.  It has a much lower cost than hiring highly trained professional statistician. . Data Mining: Data mining can be defines as extraction of hidden predictive information from large databases and is a new powerful technology with great potential to help company¶s focus on most important information in data warehouse. It uses advance algorithms.taken in entering data into data warehouse otherwise invalid data will produce the wrong results. potentially useful and ultimately comprehensible information from database that is used to make crucial business decision.  It can be incorporated with DSS (Decision Support System) which helps the manager to take wise and quality business decision. Data mining is the process of identifying valid. Better enterprise intelligence. for a business organization quality decision making is very important for its success and decision making is depend upon availability of information. Advantages of Data warehouse:     Increased quality and flexibility of enterprise analysis as multidimensional database is used. multiprocessor computations. massive database etc. Advantages of data warehouse:  Automated prediction of tends and behavior: It automate process of finding predictive information in large databases.