Introduction to

ERP
Presented by:
Er. Puneet Thapar
Assistant Professor
LKCE, Jalandhar
 Overview of enterprise systems
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 Evolution of ERP
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 Risks and benefits
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 Fundamental technology
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 Issues to be consider in planning design
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 And implementation of cross

functional integrated ERP systems

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 Enterprise resembles a group of people with a
common goal. It has certain resources at its
disposal to achieve the goal.

 Enterprise system (ES) is an ideology of planning
and managing the resources of an entire
organization in an efficient, productive and
profitable manner, and is manifested in the form
of configurable information system packages.

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 Information system is a set of people,
procedures and resources that collects,
transforms and disseminates information in an
organization.

 “An Information system (IS) can be organized
combination of people, hardware, software,
communication networks; and data resources
that stores and retrieves, transform and
disseminate information in an organization”
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  People
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 Procedure
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 Data

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 Collect data
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 Store and process data
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 Present information

to managers/users

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 Business modeling is the activity of
representing processes of an enterprise, so that
the current process may be analyzed and
improved
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 Business modeling (creation of business model) is
considered as the first activity in any ERP project

A business model describes the rationale of
how an organization creates, delivers and
captures value.
 Enterprise resource planning systems (ERP)
are management information systems that
integrate and automate many of the business
practices associated with the operations or
production aspects of a company

 These typically include manufacturing,
logistics, Distribution, inventory,
shipping, invoicing and accounting
 ERP is the technological backbone of e-
business, an enterprise-wide transaction
framework with links into sales order
processing, inventory management and
control, production and distribution
planning and finance.

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 Before year 1960 : business has to depends
on classical inventory management of
scientific inventory control

 In Year 1960 : The concept of ERP was
limited to the fact that organizations want
to integrate functions and department s to
increase revenue

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 Year 1970: the focus shifted to material
requirement – Material requirements planning
systems developed
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 Year 1980: MRP II (materials requirement planning
II) included areas such as project management,
shop floor and distribution management
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 Year 1990: Enterprise wide inter functional
co-ordination and integration
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 Year 2000: Extended ERP came into market
which offers extended services

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 Business Integration
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 Flexibility
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 Better analysis and planning

capabilities
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 Use of latest technology

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 Feature of ERP

Accommodating Integrated management

variety information

Seamless
Database creation
integration
Supply chain Resource
management management
Integrated data
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 Two-tier Architecture
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 Three-tier Architecture

Any ERP Architecture has to designed for

three basic functional areas:

1. Database

2. Clients

3. Application components

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 Repository

GUI Logic
DB driver
Driver server RDBMS

Operating system
(UNIX,NT)
 Risk is a problem that has not yet happened
but which could cause some loss or threaten
the success of project if it did

Types of risks:

1. People risks

2. Process risks

3. Technology risks

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 People – employees, management,
implementation team, consultants and vendors
Risks related to people:
1. Change management
2. Internal staff adequacy
3. Training
4. Employee relocation and re-training
5. Top management support
6. Discipline
7. Resistance to change
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  Programme management
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 Business process reengineering
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 Stage transition
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 Benefit realization

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 Software functionality
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 Technological obsolescence
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 Application portfolio management
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 Enhancement /upgrades

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 Reduction of lead time
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 On-time shipment
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 Reduction in cycle time
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 Improved resource utilization
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 Better customer satisfaction
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 Improved supplier performance
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 Increased flexibility
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 Decision making capability

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 Expense and time in implementation
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 Difficulty implementing change
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 Difficulty integrating with other systems
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 Risks in using one vendor
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 Risk of implementation failure

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 The term Business Intelligence (BI)
represents the tools and systems that play
a key role in the strategic planning process
of corporation
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 Business intelligence systems gather data
from multiple sources and process by means
of advanced analytics and reporting
supporting decision making
 “A data warehousing is subject oriented
integrated non-volatile, time varying collection
of data in support of its decision making
process”
Characteristics:
1. Subject oriented
2. Integrity
3. Time variant
4. Non - volatile
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 Data mining or Knowledge Discovery in
Database (KDD), is the nontrivial extraction of
implicit, previously unknown and potentially
useful information from data.
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 This encompasses a number of different
technical approaches, such as clustering, data
summarization, learning classification rules,
finding dependency networks, analyzing
changes and detecting anomalies
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 Online analytical processing (OLAP) is a method
of analyzing data in a multi-dimensional format,
often across multiple time periods, with the aim
of uncovering the business information
concealed within the data
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 OLAP defined as “The dynamic synthesis,
analysis and consolidation of large volumes of
multidimensional data”

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 Business process re-engineering is a fundamental
rethinking and radical redesign of business
processes to achieve dramatic improvements in
cost, quality, speed and service.
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 BRP defined as “ BRP encompasses the
envisioning of new work strategies, the actual
process design activity, and the implementation
of the change in all its complex technological,
human and organizational dimensions.
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 PLM is a strategic business approach that
applies a consistent set of business solutions
in support of the collaborative creation,
management, dissemination and use of
product definition information across the
extended enterprise and spanning from
product concept to end of life

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 Supply chain management is the systematic,
strategic co-ordination of the traditional
business functions and tactics across these
business functions within a particular
company and across business within the
supply chain, for the purpose of improving
the long-term performance of the individual
companies and the supply chain as whole.
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 CRM (Customer relationship management) is
a comprehensive strategy and process of
acquiring, retaining and partnering with
selective customers to create value for
the company and the selective customers
to create superior value for the company
and the customers

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1. Use of external consultants

2. Supplier relationship management

3. Business measures

4. User training

5. Project size

6. Length implementation time

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7. High initial investment

8. Unreasonable deadlines

9. Insufficient funding

10. Interface

11. Organizational politics

12. Unexpected gaps

13. Configuration difficulties

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 Expense and time in implementation

 Difficulty implementing change

 Customization
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 Difficulty integrating with other systems

 Risks in using one vendor
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 Risk of implementation failure
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 Management reporting needs
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 Technological challenges

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