ENTERPRISE RESOURCE

PLANNING
Business without ERP
Customers
PP contacts
Purchasing for
raw material

4
Purchasing

Customer
Calls to
1 place order
for a Car Sales
office/Inventory
contacts PP Production
Planning
3
3
Sales office
contacts
Inventory

Sales Inventory
Business without ERP (Contd..)
Where is my
car
What is this
Customers confusion

What to
manufactu
re??
Whom to Production
contact for Planning
status?

What is
Cost and
Sales Shop floor
profit
Finance

Purchasing
Vendors
Inventory
Lets Deliver the end product to
customer.. I did not order
for a
TRUCK!!!!

Dear Sir,
Your Order…

Sales
Business without ERP
I AM NOT TAKING
DELIVERY AND WILL
NEVER DEAL WITH YOU!

We are
SORRY Sir

Sales
Overall Picture

Vendors

Sales Purchasing

General
Ledger MM
Customers Fin

Production
Planning

Inventory Shop Floor

Execution
WHAT IS ERP ?
Enterprise Resource Planning systems
(ERPs) integrate all data and processes of an
organization into a unified system.

A typical ERP system will use multiple

components of computer hardware and
software to achieve the integration.

A key ingredient of most ERP systems is the

use of a unified database to store data for
various system modules.
ERP
 KEY COMPONENTS

DATABASE
INFORMATION
TECHNOLOGY

APPLICATIONS

BUSINESS MGT
PRACTICES
ERP systems are large computer systems that
integrate application programs in accounting , sales
(i.e., order booking), manufacturing (i.e. product
shipping) and the other functions in the firm.  
This integration is accomplished through a database
shared by all the application programs. 
 ERP HISTORY IN DEPTH

The first software that was designed to

assist the manufacturing process
happens to be the MRP (Material
Resource Planning) in the year 1975.
This was followed by another advanced
version namely MRP2 which is the
acronym for Manufacturing Resource
Planning.
None of them yielded benefit of ERP.
DRAWBACKS OF MRP
SYSTEMS
These Software's were helpful in manufacturing
processes only.

Their benefits do not extend to other sectors.

The MRP solutions did not render the expected

results due to exorbitant costs and practical
work problems.

MRP systems required huge pool of technical

expertise in terms of manpower and machines.
 ADVENT OF ERP
ERP came into being with effect from 1990.
Though ERP existed from the year 1960 in the
form of MRP1 and MRP2.

Infact MRP2 was more or less ERP except for

its inability to coordinate departments other
than marketing.

The whole period from the year 1960 is

denoted as the age of ERP.

The benefit of ERP was slowly felt from this

stage onwards.
 DEFINITION OF ERP

Software solution that address the

enterprise needs taking the process
view of an organization to meet the
organizational goals tightly
integrating all functions of an
enterprise.
WHY ERP?
Complete integration of systems
across the departments in a company
as well as across the enterprise as a
whole.
Only solution for better project
management.
Better customer service.
Automatic introduction of latest
technologies.
Expertise database.
PROBLEMS TACKLED BY ERP
SYSTEMS
Material Shortages
Productivity Enhancements
Customer Service
Cash Management
Inventory problems
Quality Problems
 ERP SELECTION

Check whether all functional aspects of

business are duly covered.

Check whether all the business functions and

processes are fully integrated.

Check whether all the latest IT trends have

been covered.

Check whether the vendor has customizing

and implementing capabilities.

Check your purse and calculate ROI.

HOW DO WE START FOR ERP?
Ensure the management is behind you.
Ensure enough financial funds.
Identify core project team, project
manager, analysts and specialists from
all functional areas.
Evaluate and select ERP package.
Make an implementation plan.
Present plan to management committee
for sanctions.
Present plan to employees group for
feedback.
DEFINE REQUIREMENTS

Check whether you have desired

hardware
Train ERP team
Analyze the existing processes
Fine-tune the processes to be in
line with those of ERP defined
Refine the prototype and freeze
the specifications
ERP IMPLEMENTATION
Commitment from management.
Form a task force with personnel
from all functional areas.
Take care of hardware
requirements.
Step-by-Step rather than big bang
introduction.
Be patient . ERP implementation
takes time.
CHANGES OF CUSTOMER INFORMATION
 DATA STORAGE IN ERP
Data is stored in the form of tables.
DATA TABLES:
This group of tables control who can log on to the
company and what functions they can perform.
This allows the Systems Administrator to define a
limited set of roles and allocate those roles to a large
group of users .
i) USER: This table contains one record for every user
that can log into the company.
ii) ROLE: This table contains one record for each role. It
is used by every function in every module.

FUNCTIONS: The ERP package has a pre-defined table

which lists all the possible functions that can be
performed.
 DECIDE MAKE OR BUY ERP ?

INHOUSE DEVELOPMENT ERP PACKAGE

INHOUSE DEVELOPMENT:
Project development takes time.
Documentation is difficult.
Maintenance depends on individual.
Enterprise implementation is difficult as each unit
follows different software option.
Latest developments to be studied before
implementation.
DECIDE MAKE OR BUY?
(Continued….)

ERP PACKAGE :

Documentation is a part of system.

Ready made projects needs only
customization.
Company takes care of maintenance.
The package itself is designed as enterprise
package.
Constant updates on technology and
processes assured.
 ADVANTAGES OF ERP
Ease of use.
Readymade solutions for most of the
problems.
Increases access to available data for decision
making.
Timely and accurate information.
Easy enterprise wide information sharing.
Suppliers and customers can be online
communication.
Automatic adaptation to new technologies.
Knowledge transfer between industries
guarantees innovation.
DISADVANTAGES OF ERP
Takes time to implement.
Large amounts of workers have to shun their
regular labor and undertake training.
This not only disturbs the regular functioning
of the organization but also runs the
organization in the huge risk of losing
potential business in that particular period.
Expensive due to outside consulting, data
analysis and conversion, training.
It leads to performance problems that is when
people can’t do their jobs in familiar way and
haven’t yet mastered the new way. This
causes panic and business goes into losses.
CONCLUSION

Reduced overheads and inventory.

Timely responsiveness.
Market share and image
enhancement.
Keep up with technology changes.
Only way for integrated systems for
client with multiple locations.