You are on page 1of 12

Submitted to: Ms.

Shaveta Chugh

Presented by: Divya Gulati M.Com-I Roll No.5040

After increasing the complexity in business process , ERP has

become famous among business community . If we have to define it in simple way .Then we can say that ERP is the new invention of Information technology in which experts make the system for integration of all business processes . For this , they utilize different software and hardware , with this all process of business like , accounting , human resource , production and now marketing are managed . So , ERP has obtained reputation in market .Before using of ERP different business process was done by different software and businessmen felt tension regarding co-ordination of all processes . Now , ERP is very scientific technique of Controlling whole business by co-ordination of all information on shared data base

Function of ERP
Better control: With ERP, business can better control over its billing

to customers and receivables. With the ability to automate processes. It provides better operational, financial and accounting control over its billing operations and receivables. Integrate information: ERP system can be used for accomplishing every task by integrating the information system, seamless flow of information across every department. It is helpful to make automation of every business process. Effective Planning: ERP is a cross functional enterprise system which deals with planning. ERP helps to execute strategies, plans, decisions and actions within given timeframe as information of all activities are easily accessible thus helps management to make plans quickly and effectively. Provides information to all departments of organisation: ERP treats the organisation as single entity and caters to the information needs of the whole organisation because information is the key resource of every organisation to win the competition. ERP system provides accurate, relevant and timeliness information to all

Provides updated information in time: Main function of ERP

system and software is to provide information updated and on real time. People in different departments all see the same information and can update it. When one department finishes with the order it is automatically routed via the ERP system to the next department. Query and filtering facility: In ERP, you can get answer of any query by its powerful query and filtering facility. Other facilities: Now advance ERP software packages are providing the facility to manage import, export, tax and fulfilling other legal requirements . Provides needed information: Computer aided design can also integrate with ERP software for showing design of products on real time and according to the need of customers. Provide all financial analysis: ERP provides also all financial analysis under finance modules and comply with India's and other international accounting standards .

Speedily work: To find out where the needed information is at

any point, you need only log in to the ERP system and track it down. The information process moves like a bolt of lightning through the organization, and users get their information faster and with fewer errors than before. It is the end to end approach in order to manage the consumer needs and requests. Optimum utilisation of resources: Earlier, the inability to accurately forecast the resource utilisation was a major problem for managers but now ERP provides an access to accurate and timely information about current and forecast utilisation on demand thus reducing wastage and leading to optimum utilisation of resources. It helps in eliminating the redundant information and unnecessary process.

ERP Characteristic
It is a comprehensive and integrated set of IS applications

covering the key business transactions of an enterprise. Information and data are held in a common integrated database. Data is updated in real-time, that is, as events trigger transactions. Information updated is flexible i.e. it can be changed according to the need of customers. Security of data, files and information is assured. It gives authority thus establishes responsibility.

Advantages of ERP
Saves time: The fundamental advantage of ERP is that

integrating businesses processes saves time. It reduces burden of paperwork. Helps in quick decision making: Management can make decisions faster and with fewer errors. Data becomes visible across the organization: Complete visibility into all the important processes across various departments of an organization especially for senior management personnel Improves efficiency of business and production can be increased : ERP can greatly improve the quality and efficiency of a business. By keeping a company's internal business process running smoothly, ERP can lead to better outputs that benefit the company such as customer service, and manufacturing.

Support to upper level management: ERP provides support to upper

level management to provide them with critical decision making information. This decision support allows the upper level management to make managerial choices that enhance the business down the road. Allows adaptation of change: ERP also creates a more agile company that better adapts to change. ERP makes a company more flexible and less rigidly structured so organization components operate more cohesively, enhancing the businessinternally and externally. ERP can improve data security: A common control system, such as the kind offered by ERP systems, allows organizations the ability to more easily ensure key company data is not compromised. ERP provides increased opportunities for collaboration: Data takes many forms in the modern enterprise. Documents, files, forms, audio and video, emails. Often times each data medium has its own mechanism for allowing collaboration. ERP provides a collaborative platform allowing employees to spend more time collaborating on content, rather than mastering the learning curve of communicating in various formats and across distributed systems.

Disadvantages of ERP
Costly: The cost of ERP Software, planning, customization,

configuration, testing, implementation, etc is too high. Increase vendors negotiation power: High ERP switching costs can increase the ERP vendor's negotiating power, which can increase support, maintenance, and upgrade expenses. Needs careful attention so that information does not leak out: Overcoming resistance to sharing sensitive information between departments can divert management attention. Unnecessary dependencies: Integration of truly independent businesses can create unnecessary dependencies. Users should be trained: The participation of users is very important for successful implementation of ERP projects So, exhaustive user training and simple user interface might be critical. Not effective in decentralized organisations: ERP implementations are difficult to achieve in decentralized organizations with disparate business processes and systems.

Models of Enterprise Resource Planning


Business system

Central Data Base (CDB)


EMPLOYEES MANAGEMENT FIXED ASSETS MANAGEMENT BUDGETORY SYSTEM, INVENTORY MANAGEMENT COST ACCOUNTING MARKETING FINANCE PERSONNEL

PRODUCTION

MAINTENANCE
QUALITY CONTROL

CONSOLIDATION OF BUSINESS OPERATIONS

The generic ERP package represents the commonly operated business model of the organisation. It is built with the function models like Finance, Materials, Marketing, Sales, and Personnel and their sub-modules. These modules are then integrated to perform ensuring data and information consistency and concurrency. The seamless integration of the modules allows the user at any level to take a micro and a macro view of the function and process view of the transaction across the function. A typical ERP solution has the following modules: Business forecasting, planning and control (Business) Sales, distribution, invoicing (Sales) Production planning and control (Production) Material management (Material) Finance and accounting (Finance) Personnel management (Personnel)

Following table shows the sub-module details of each module.


BUSINESS SALES PRODUCTION MATERIALS FINANCE PERSONNEL

Forecasting Forecasting
Planning Planning

Planning
Order Control

Purchase
Inventory

Accounting

Human Resource

Payroll Funds management

Goals

Sales Budget
Order Processing

Work in Progress
Quality

Stores

Objectives

Valuation

Balance Sheet Processing Schedules

Accounting

Skill attendance Inventory Analysis

Targets

Order Execution Delivery Invoicing

Scheduling

Analysis

Analysis

Strategy control

Despatch

Control

Control

Control