IT & E-Commerce

Paper VIII

Nagesh DEVKATE
Topics to be covered
• Enterprise Resource Planning (ERP)
• Electronic Data Interchange (EDI)
 Enterprise Resource Planning
ERP is short of Enterprise Resource Planning, which is business management system that
integrates all facets of the business such as manufacturing operations, supply chain, customers,
human resource and finance.

The salient features of the above definition is that ERP refers to in house developed or
commercially available software solutions which provide an integrated suit of IT applications
that support the activities of the organization as a whole.

ERP systems are the information backbone of the company.

It serves as central nervous system and is termed as Digital Nervous system of the company.
Why do you need ERP system?
Implementation of ERP system in a business change the way of working of an
individual.

The Top Management needs to be highly practical in explaining the reason for
the implementation and how will business as a whole will get the benefit.

There are some benefits from ERP:

1) Helps in process automation
2) Fewer errors high efficiency
3) Better communication
4) Accomplish better performance
Introduction to ERP concept key terms
Integration of operations with accounting results in converting physical units
In rupee value.

ERP integrates all facets of business including:

1) Planning
2) Manufacturing
3) Sales

Software applications have emerged to help business managers

implement ERP in business activities such as:
4) Inventory control
5) Order tracking
6) Customer service
 ERP software development
• Domain knowledge required for developing an ERP software

• Database Design of an ERP software.

• Interface design (Presentation Layer) of the ERP software .

• Data Access Layer which includes the classes to access the database.

• Business layer which contains the classes to implement the business logic.
 ERP - Financial Side
• Establishment Cost

• Change Management Cost

• Training Cost

• Software Cost

• Hardware Cost

• Design and Implementation Cost

• Consultants Costs

• Data Cleansing Cost

• Repair Maintenance and Upgrade Cost

• Decommission

Sample Cost Estimation Design and Implementation… Software 10% Hardware 10% Data Cleansing
10% Training and Change Management 35%
 ERP integration
• ERP helps to integrate finance, accounting, manufacturing, project, retail and other
supply chain management business processes

• Improve profitability and accomplish project goals on time and on budget

• Better decision-making for people across one’s organization—from warehouse

personnel to financial analysts

• Create accurate budgets and meaningful financial predictions with effective planning,
budgeting, and reporting tools.

• Use service-oriented architecture (SOA) and web services to extend and connect
business solutions.
 What is SAP ERP?
SAP ERP is enterprise resource planning software developed by the German company
SAP SE.

SAP, started in 1972 by five former IBM employees in Mannheim, Germany.

The original name for SAP was German: Systeme, Anwendungen, Produkte, German for
"Systems Applications and Products.
 SAP BUSINESS ALL-IN-ONE
SOFTWARE

THE MAIN OBJECT OF ERP

• keep record of the overall business under one database

• use data security and access control

• generate reports with very few mouse clicks and in less time

• high security and restricted access control

• real time from anywhere according to the needs.

 CONCLUSION
• ERP systems centralize business data, which: Eliminates the need to synchronize
changes between multiple systems—consolidation of finance, marketing, sales,
human resource, and manufacturing applications.

• Provides a comprehensive enterprise view islands of making real–time

information available to management anywhere, anytime to make proper
decisions.

• Protects sensitive data by consolidating multiple security systems into a single

structure.
Electronic Data
Interchange
 Electronic Data Interchange (EDI)

• What is EDI?

– Exchange of electronic data between companies using

precisely defined transactions

– Set of hardware, software, and standards that accommodate

the EDI process
Electronic Data Interchange
Suppliers, manufacturers, and retailers cooperate
in some of the most successful applications of EDI.
 How does EDI work?

Supplier’s proposal sent electronically to purchasing organization.

– Electronic contract approved over network.

– Supplier manufactures and packages goods, attaching shipping data recorded on

a bar code.

– Quantities shipped and prices entered in system and flowed to invoicing

program; invoices transmitted to purchasing organization
 How does EDI work?
– Manufacturer ships order.

– Shipment notice EDI transaction sent (not shown)

– Purchasing organization receives packages, scans bar code, and compares data
to invoices actual items received.

– Payment approval transferred electronically.

– Bank transfers funds from purchaser to supplier’s account using electronic fund
transfer (EFT).
How does EDI work?
 EDI Standards
EDI requires companies to agree on standards
• Compatible hardware and software
• Agreed upon electronic form format

Established EDI standards

• Automotive Industry Action Group (AIAG)
• X.12 de facto umbrella standard in U.S. and Canada
• EDI for Administration, Commerce, and Trade (EDIFACT)
umbrella of standards in Europe
 How to Subscribe to EDI?

• Larger companies purchase hardware and software

• Medium and small companies seek third-party service

 Value-added networking (VAN)
 Managed network services available for a fee
 EDI on the Web

– Advantages of Web EDI

– Lower cost
– More familiar software
– Worldwide connectivity

– Disadvantages of Web EDI

– Low speed
– Poor security
 The Importance of EDI

– Need for timely, reliable data exchange in response to rapidly changing

markets

– Emergence of standards and guidelines

– Spread of information into many organizational units

– Greater reliability of information technology

– Globalization of organizations
Thank You